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economics
Updated: 3/27/2020
economics
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Storyboard Text

  • It seems that with the rise in popularity, consumers are consciously choosing hoverboards over other goods such as razor scooters. (consumer taste) With the reduced price, it seems like it is the perfect time to buy one. Just know that the price of a hover-board will be over $250 due to the excise tax mandated by the government. Its crazy how profitable hover-boards have been, but it makes sense when the input cost is only $75. Given the low prices of helmets and hover-board insurance, two compliment goods, now is the perfect time to buy!
  • I've been going to every store in the city trying to get my hands on one. There is a lack of supply, because apparently the machines used to make them are broken. The demand for them has been increasing everyday, especially in teenage kids like my own. I believe seeing them everyday on social media and the reduced price has caused this.
  • A few months ago there was a disequilibrium, because the price for hover-boards were $500 and parents weren't willing to pay that. Now that the price decreased to $250, parents are willing to buy them. It seems that the consumers and producers are happy with the price they are being sold at. (equilibrium price)
  • When the price for hover-boards were $500, not many people were buying them. When the price decreased to $250, parents were more willing to buy. (Law of demand) This year i got a Christmas bonus, which made me more willing to buy one. (income effect)
  • We've been selling hover-boards for a few months now, but once we decreased the price, the demand for them increased. When we were selling them for $500, we were more willing to produce them because we would be making $425 off of each sale. At the price of $250 we are still producing them, but not a many since we are only making $175 off of each sale. (Law of supply)
  • After we dropped the price, there was a substitution effect where people stopped buying razor scooters and now started buying hover-boards. The price of razor scooters are $300, so hover-boards, being $250, became the better economic choice this Christmas season.
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