Law of Supply and Demand

In this world, much of it works by the economic theory of supply and demand.  This means that typically, when supply is tight, the price will be higher than when a commodity is in abundance, in which case the “equilibrium” price will be lower.  (see the graph below.)

Take, for example, tickets to a rock concert. Supply is limited, meaning the quantity is limited.  Optimal pricing will balance supply and demand so that (best case scenario) all tickets will be sold, maximizing revenue for the venue and performer.  If the price is too low, the venue and performers are leaving money on the table; if the price is too high, tickets won’t all be sold, meaning a potential loss of maximum revenue for everyone involved.  If the group playing is really popular, tickets may sell out quickly and a secondary market (ie scalping) will develop- but this market only creates profit for those willing to sell tickets- no additional revenue is gained by the performer or venue in this transaction.

If I wait too long to purchase my ticket to an event, I may find I incur a penalty- I may be left to try to find a ticket on the secondary market and have to pay a significant premium, and will have to judge whether or not that “extra” is worth it to me.

Likewise, some events, like Podcasters Across Borders have an “early bird” discount for people willing to commit to attend the event early.  If you register after that date, you pay full price.  Podcamp Boston has an attendance fee this year, and has recently placed a premium on the few remaining tickets.  Why is this?

Each additional person deciding at the last minute to attend the event has placed a stress on the organizers and venue.  Catering menus have to be altered, and additional costs incurred.  Swag was ordered per deadline weeks ago, and the additional attendees mean there may be a shortage, incurred because a few people did not register sufficiently ahead to allow organizers to plan for them.  I understand people have things come up and must alter their plans.  That’s normal.  But I think all of us in New Media who are reluctant to plan our lives more than a week in advance have to begin to realize that failure to plan ahead will begin to make it more and more likely that a premium will be incurred.  If you are willing to pay the premium, please, go ahead and continue to make last minute plans.  If you are unhappy about paying more, please plan a bit more in advance.  But please don’t complain to the hard working organizers of events for the extra cost- they are working hard to meet the needs of many people, and your last minute planning causes them many headaches.  please be considerate and plan ahead, and everyone will win.  Law of Supply and Demand.

Supply and Demans

Supply and Demand

About these ads

6 Comments

Filed under Uncategorized

6 responses to “Law of Supply and Demand

  1. So well said Whit!

    Of course, new media conferences aren’t the only ones charging premiums for late decisions, the travel industry has done this for a long time. I don’t see anything wrong with it (especially since we do it at PAB).

    For someone to decide at the last minute to go is fine, but for there to be somewhere to go, someone somewhere had to commit effort/time/finances/sweat. It’s only normal to pay a premium to have avoided doing any of those..

    Enjoy Boston! Sorry I won’t be there :(

  2. Wish you would be there!

    Thanks for your support, Bob! Podcasters Across Borders is such a fantastic conference, and I think making sure people appreciate the opportunities they have there is important. As an organizer, making last minute adjustments is a real drag, and it’s hard to get the point across to the community that if they fail to plan ahead, disappointment on their side and that of the organizers might ensue- it would be so much easier if people were just a tiny bit more considerate of others, particularly when they fail to plan ahead.

  3. Pingback: The rule of no exceptions

  4. Nice article!
    For those who want to understand how the Law of Supply and Demand works I’d advice the following article:

    http://www.myhowtoos.com/en/how-it-works/82-how-a-free-market-works

  5. geosocial

    Reall? That’s the best you could come up with?

  6. geosocial

    How many actual “ex-gay” men exist? I assume zero.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s