MicroEconomics (AGH)
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PS4 “economics” closer to PS2 than PS3 | VG247

Ed Cox's insight:

As the Games Console Market and Video Games Markets are highly compimentary products, the PS4 by Sony has chosen to set the console at a price level rather close to that of what it costs to manufacture ("analysts believe the hardware cost of the PS3 is around $381, which is quite high compared to its RRP of $399 in the US") , in order to stimulate demand for the console, and steal market away from the Xbox One, and to make their major amounts of money on games.

 

As, unlike the Console Market, games have likely a relatively low PED (You can't play Xbox Games on Playstation, and people are unlikely to avoid a blockbuster game in order to save money if they've already put money down on a console), so a higher price is more bearable by the market, possible too as each individual game takes up a lower proportion of income so people are more willing to stomach the cost.

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NFL owners destroyed the players in CBA negotiations - The Boston Globe

NFL owners destroyed the players in CBA negotiations - The Boston Globe | MicroEconomics (AGH) | Scoop.it
Two NFL offseasons have passed under the new CBA. And no matter how you slice it, the owners obliterated the NFL Players Association and new executive director DeMaurice Smith in the 2011 negotiations.
Ed Cox's insight:

The NFLPA has instituted for a while a Veteran (and Rookie) Minimum Salary, which works just like the Minimum Wage in a Government led Economy.

 

From “I’ve had teams tell me all the time, ‘Your guy is a minimum-salary guy, he’s too expensive,’ ” the first agent said. “I have veteran players that would play for $50,000 if they could.” we can see that just like a Minimum Wage in a Country's Economy it can work to create unemployment as well as protecting exploitation, as the equilibrium level of this particular players must be below the 'legal' (according to the regulations set out and agreed by the NFLPA) minimum wage, so the franchise is not allowed to employ them.


As there are, in a best case scenario, probably only going to be around 25 players active during one game, it's understandable if the Demand for the 53rd Player on the Roster has a relatively Low Demand, compared to how 'willing and able' they are to play at their talent level, which means their equilibrium may be well below '$940,000'.

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Big infrastructure projects: Before and after

Big infrastructure projects: Before and after | MicroEconomics (AGH) | Scoop.it
Is the amount of money spent on big infrastructure projects good value?
Ed Cox's insight:

Investment in Capital like Rail Lines can act as a resources for businesses and consumers to effectively tap into when they're trying to make money, so for example the connection to an area can help to raise House Prices and mean more traffic for shops.

 

However, the Law of Diminishing Marginal Utility also applies as sometimes making a project too grand, rather than just stopping it at an easier opportunity (e.g. Connecting London to Paris rather than just areas around London like the Home Counties) can mean in reality it's not providing a worthy amount of benefit.

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How Spotify Engineered the New Music Economy

How Spotify Engineered the New Music Economy | MicroEconomics (AGH) | Scoop.it
In a post-Napster music industry, Spotify seems to have concocted a winning monetization formula, but not all its participants are happy with the numbers.
Ed Cox's insight:

Spotify has managed to furthur itself and continue shifting its demand curve to the right by trying to advertise new bands, which in turn promotes the indie artists to promote spotify and creates goodwill in fans, which possibly creates more demand for their products as customers see Spotify as a sort of 'good guy' in comparison to the larger players like Apple.


Spotify can keep its overheads low by only needing to pay for Bandwidth and Licensing rather than Physical goods, and consumers like it because its easy to use, and therefore as they value their time this becomes a valuable feature.

 

For consumers, by creating a Free (Advertising Supported) and an affordably priced paid services, the Opportunity Cost of purchasing music  rather than downloading it illegally is now less, promoting a stimulation in the Music Industry. Aswell, to large consumers Unlimited Streaming is a better deal than the conventional way of purchasing music, so they've managed to corner an origionally niche market and ride it while it expands in demand.

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How To Take Uber on New Year's Eve Without Losing All Your Money

How To Take Uber on New Year's Eve Without Losing All Your Money | MicroEconomics (AGH) | Scoop.it
If you're going to use Uber on New Year's Eve, take it before 8 P.M., between 10:30 P.M. and midnight, or after 3 A.M.
Ed Cox's insight:

On a night where there's going to be high demand, Uber raises prices, in order to make producers (the drivers) more willing & able to supply their services.

 

As the demand for cabs in probably quite inelastic, as many might not really have any other viable options for getting home, this allows the Quantity Demanded of Cabs to still increase even when prices increase, due to the nature of the market and the possible capacity available.

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Jay Cutler Contract - 2014 Leaves Bears Little Choice But To Pay

Jay Cutler Contract - 2014 Leaves Bears Little Choice But To Pay | MicroEconomics (AGH) | Scoop.it
Jay Cutler Contract Update Jay Cutler Contract talks with the Bears could lead to a huge payday in 2014. This isn't because Jay Cutler is a great NFL quarterback, but he is better than most and who el...
Ed Cox's insight:

As a professional athelete who is 'better than most, and who else is there' this means Cutler will have a very low Price Elasticity of Demand (Inelastic), because there are not many substitutes, and for those that are available there is a very large Opportunity Cost (Championships, Season Ticket Holders, etc.), and therefore he can push his price up & increase his 'Producer' Surplus, because he knows he can, and because more money means he can 'overcome' the Price Mechanism (rationing) to a larger extent, he'll want to do this to set him up for the rest of his life, as atheltes have to retire relatively young.


 
Update: Jay Cutler’s contract: 7 years, $126 million with $54M guaranteed.
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Facebook revenue surges 60%

Facebook revenue surges 60% | MicroEconomics (AGH) | Scoop.it
Social networking giant Facebook reports a 60% surge in revenue to $2.02bn in the third quarter, generating profits of $425m.
Ed Cox's insight:

Facebook has managed to grow because the Opportunity Cost of not using Facebook, and using a competitor like Bebo/Myspace, or not using anything at all is increasing all the time by more people choosing Facebook, and as it is a communication platform you want to have more people available you know to communicate with.

 

As they have more demand for their advertising than others, due to their reach (particularly captive audience of mobile ads) and personalisation, they're able to charge more, which helps to boost their profits. (Aswell Opporunity Cost of not choosing them could be lost business).

 

By advancing earlier and pulling ahead in their market (they've managed to create a sort of Olygopoly with Twitter and Google as psudo-competitors), they're now cashing in on their position in a way that smaller companies are not able to do so in their stage of development.

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