Question: Historically a company created and brought a product to market. If that product was well received its popularity created increased demand. If supply became a problem, at times there might be an increase in price. But as similar products came into the market, supply increased and very often prices declined.
Today's rapidly changing technology sometimes creates demand for products even before they exist. Look at the following examples of actual products and determine, in today's increasingly consumption -oriented economy, what the impact is on supply, demand, and price and what the impact is on the economic wellbeing of individuals and families.
Case 1: Fitbit is one recent marketing success story, selling more than 10 million units to health-conscious individuals who want to track their exercise routines. Apple then announces that it will sell an Apple Watch that tracks body activity and much more with 10 different sensors. Some Apple Watch models will sell for over $1 thousand. When the Apple Watch came out some people camped out at Apple stores to be the first in line to purchase them.
Case 2: Tesla "leaks" information concerning a new all electric model they will sell for much less than the existing models. Before the car is was ready for market they had already taken sizable deposits from people willing to commit to a purchase of the car sight unseen.
• Are the markets for Apple Watch and Tesla cars elastic or inelastic?
• What is the impact on Apple and Tesla?
• What is the impact on individuals who purchase the product?
• What is the impact on an economy that is fueled approximately 70% by consumption?