The Super Bowl has become one of the most prominent annual
events in the United States in the past few years. What was once just a
championship game for a popular sport league has expanded into a extravagant
holiday rivaling some of the biggest holidays of the year in its excess. The
Super Bowl, despite being just a one day event, is able to drive up the
equilibrium points in several of its markets quite dramatically. The most
commonly known version of this is in advertisements. For a company to manage to
obtain commercial time during the super bowl costs companies millions upon
millions of dollars, for just thirty seconds. The Supply is incredibly limited,
but the Demand is dramatically increased during the super bowl, causing the
point of equilibrium to gain in price, but stay the same in quantity.
Advertisements aren’t the only place where demand increases
dramatically. Memorabilia for both teams in the Super Bowl will be very high in
the weeks leading up to the super bowl. Normally, the NFL will have its
producers churning out as much supply as possible to meet the very high demand,
but this year, the NFL is facing an issue. The NFL has had a contract with
Reebok to be the producer of replica jerseys, but the contract ends this year,
and Nike will take over production. This is causing Reebok to limit production,
because they don’t want to end up with excess supply that the NFL may not sell
because the contract is over. This is causing an issue, because Reebok won’t
produce jerseys for players they don’t have confidence they will be able to
sell off. The Biggest names are still being produced to meet demand, but some
other names that are currently in high demand are not being produced at a
supply to meet demand. This is causing a radical shift in the supply demand
framework, because supply is shifting inward because of the producer’s actions,
while demand is shifting outward because of the consumer’s currents tastes.
What makes this different though is there is no real change in price of the
product. The producer isn’t going to sell them for a higher price, because the
NFL wouldn’t allow them, because it makes them look bad. If the products are
being sold secondhand, the prices will probably be getting higher.
Source:
http://money.cnn.com/2012/01/26/news/companies/giants_patriots_nfl_jerseys/index.htm?iid=SF_BN_River
