What is supply and demand? Simply defined, supply and demand says that prices are low when there are plenty of products available for purchase. Read more about how this economic principle works.
#Supply and demand graph plus
However, the fact that those first 30 HDTV sets sold out so quickly at a price of $5,500, plus the $1,700 that was charged for the set top box that was required to receive digital signals, indicated that there was some demand.Īs your business seeks to determine the right price point for products and the amount needed to satisfy demand, supply and demand graphs can help. Most of those 15,000 people were curious to see HDTV and didn’t intend to purchase a set. Dow’s inventory of 30 sets quickly sold out. One of those stores, Dow Stereo/Video in San Diego, reported that 15,000 people visited the store on the first weekend.
Panasonic released a limited supply of mass-produced sets to a couple of stores on the west coast. So it was hard to estimate how much it would cost to make them and how much to charge to sell them. The first TVs that were available to the public carried a huge price tag because the components the manufacturers needed were more expensive than anticipated. What changed?Īn oversimplified answer to that question would be supply and demand.Ģ1 years ago, nobody was mass-producing HDTVs.
The pictures were stunning, as were the prices-$5,000 to $15,000 on average.įast-forward 21 years and the average HDTV costs less than $500. In 1998, HDTV sets were made available for the first time to American consumers.
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