Supreme's Laws of Supply and Demand

Source:https://edublognss.wordpress.com/2013/04/17/supply-and-demand/

The economic principle I’m exploring is “The laws of supply and demand”

My research question to help me study the economic principle is “How has the choice for Supreme to have limited supply of items and only a few store locations contributed to the public demand for the products? How and why? Why has Supreme deliberately limited the supply of its goods despite consumers willing to pay such a price?”

The article published in Investopedia titled “Law Of Supply and Demand.” demonstrates this economic principle because it shows the relationship between supply and demand, and the factors the contribute to why supply and demand change.

First, I looked into what supply and demand were. I had previously learned that supply and demand are on a scale and you need to find a balance or equilibrium between the two. The article elaborated on that by saying “Generally, low supply and high demand increase price.” So that answers my question, there is a low supply of Supreme products so the demand is high. But Supreme hasn’t changed it’s prices rapidly because of their success, and they haven’t capitalized on the popularity of their products and made more of them.

I wanted to look into this more. If I was in charge of Supreme I would be opening more stores and selling way more product, to capitalize on the success of the brand, but Supreme has chosen to stay a “small” brand. For this I had to look into what would happen if they made more product and increased their supply. I found in the article that “the greater the supply and the lower the demand, the price tends to fall.” This made me wonder if and increase in supply would drastically change Supremes customer base. Supremes current marketing plan is that they have limited items, and it’s “hype” to own them.

Third, If Supreme were to increase their supply how would it affect the demand. I found that “Demand is affected by the quality and cost of a product, among other factors. The number of available substitutes, amount of advertising and the shifts in the price of complementary products also affect demand.” I came to the conclusion that Supreme has to keep a lower supply of products in order to remain relevant. If they were to increase their supply they would be like every other brand. People are attracted to the “hype” of items, and it draws in its own niche market. In my next blog post

I will research: What effects do “pop ups” have on the resell market? Does it increase or lower demand for product?