Demand shift - camera decreased and turned to an excess in supply Kodak decreased the price to $129.99 to avoid surplus Increased cost of labor

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As a result of the income increase the last two years, and because Kodak is a very popular company for cameras, more people are willing to buy the camera, which caused an excess in demand. As a result Kodak increased the price of the camera to $170.00 to eliminate shortage. Increased price of substitutes increases demand Kodak has cheaper prices on cameras than other companies like Canon or Nikon, therefore more people are willing to buy the Kodak camera to save money, which increased an excess in demand. Kodak raised the price of the camera to $170.00 to avoid shortage. Increased price of complements decreased demand. Since most Digital cameras require a memory card to save the pictures on, the price of the camera depends on such complements. Because a 2GB memory card now costs about $70 the demand on the
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Unformatted text preview: camera decreased, and turned to an excess in supply. Kodak decreased the price to $129.99 to avoid surplus. Increased cost of labor lowers supply For the last two years the labor wage has been going up, which increased the cost of labor for Kodak. The increase of cost forced Kodak to decrease the supply of the camera causing an excess in demand. As a result Kodak raised the price to $170.00 to avoid shortage Decreased cost of materials increases supply Since Kodak have been in the camera business for a long time, they manage to produce their own materials instead of buying them from other companies. The decreased cost of materials made it easy for Kodak to have the camera more available in stores. Kodak lowered the price to $129.99 to avoid surplus....
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This note was uploaded on 05/23/2010 for the course ENG English 1A taught by Professor Roenchein during the Spring '10 term at Pasadena City College.

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