Each Question must be
answered at least 150 words
Click on the following
link of the Case Study and Answer the following Questions:
Breakdown of Gas Price
1. Define Supply and Demand. Draw a supply and demand curve and label
2. Demonstrate the relationship that prices paly in supply and demand
for different goods and services. Also define surplus, shortage, and
3. Does the other oil get used, or does it
just get disposed? That seems like such a waste. 4. Why do petrol prices keep increasing? Elaborate your
5. What do you understand by ‘Crack Spread’? Explain.
Read the following Case
Study and Answer the following Questions: Wii Console
DEMAND & SUPPLY
The Wii is a video game console made by Nintendo. It seems that this is
the one of the most successful consoles made by Nintendo to date, and it is the
successor to the Gamecube. The Wii is Nintendo's fifth home video game console.
The Wii is a very interesting console, having WiFi
online capabilities, wireless controllers, and blue-tooth.
The Wii is different than other video game consoles launched by
Nintendo in the past due to many reasons, but the main one is the controller.
The controller has revolutionized gaming. The controller uses a miniature
gyroscope inside of it to detect its orientation, and a sensor bar attached to
the Wii console to detect where it is in 3D space. The controller can be used
much like a mouse, as things on the screen can be manipulated simply by
pointing and pressing a button, but instead of moving the controller on a flat
surface, a person can simply point the controller at the TV much like a TV
remote. By this merit, the controller has become simple, and it gives game
developers something new to toy with. Nintendo packaged a game with the system
The Wii "has been a sell-out virtually everywhere in America,"
Fils-Aime said in an interview. "We understand the frustration of
consumers...I can tell you that we expect no slowdown after the first of the
year. We want to say that if you could possibly hold out just a little longer,
there will be more product in January."
called Wii Sports, which features 5 different minigames: baseball,
boxing, bowling, tennis, and golf, each having the player using the controller
as if they were playing the actual game. For example, you would swing the
remote as if it was a tennis racket in tennis.
On September 14, 2006, Nintendo released information for Japan, North
and South America, Australia, Asia and Europe, including dates, prices, and
projected unit distribution numbers. It was announced that the majority of the
2006 shipments would be allotted to the Americas. The media hype began
The Wii was launched in the United States at $249.99 on November 19,
2006, two days after the PS3 was released in North America. It was later
launched in the United Kingdom on December 8, 2006 at £179. The Wii was
launched in South Korea on April 26, 2008 and in Taiwan on July 12, 2008.
The UK suffered a widespread shortage of console units as many
high-street and online stores were unable to fulfil all pre-orders by Christmas
2006. Some UK stores still had a shortage of consoles by March of the next
The market lead is largest in the Japanese market, where it currently
leads in total sales, having outsold Play-station 3 and Xbox 360 by factors of
2:1 to 6:1nearly every week from launch until November 2007. In 2008, the Wii
was the best-selling home console in Japan with 2,908,342 units sold.
In Australia, the Wii exceeded the record set by the Xbox 360 to become
the fastest-selling game console in Australian history.
In the North American market lifetime-to-date sales for the Wii have
reached 30 million in the North American market alone since the console's
launch in November 2006. Demand still outpaced supply in the United States as
of June 2007. In October 2008, Nintendo announced that between October and
December 2008 the Wii would have its North American supplies increased
considerably from 2007’s levels, while producing 2.4 million Wii units a month
worldwide, compared to 1.6 million per month in 2007.
Unfortunately for consumers, it took until March 2009 (and 48 million
units) to make Wii available to those who want to walk into a retail store and
pick one up.
While Microsoft and Sony have experienced losses producing their
consoles in the hopes of making a long-term profit on software sales, Nintendo
reportedly has optimized production costs to obtain a significant profit margin
with each Wii unit sold. Nintendo reported on May 7, 2009
increases in operating profits for its fiscal year (April 1, 2008 –
March 31, 2009), and a rise in sales—setting record earnings compared to the
On September 23, 2009, Nintendo announced its first price drops for the
console. In Japan, the price dropped from ¥25,000 to ¥20,000, effective October
1, 2009. In the United States, the price was reduced to $199.99, effective
September 27, 2009. In Europe (excepting non-eurozone nations), the price of a
Wii console dropped to €199 from €249.
Nintendo sold more than three million Wii consoles in the U.S. in
December 2009, setting a regional record for the month and ending 9 months of
declining sales, as a result of the price cut and software releases such as New
Super Mario Bros. Wii. As of the end of that month, the Wii was the
best-selling home video game console produced by Nintendo with sales of over 67
million units, surpassing that of the original Nintendo Entertainment System.
As of June 30, 2011, Nintendo has sold 87.57 million Wii consoles.
Further Reading/ Hyperlinks;
1. Would the demand for the Wii console be relatively inelastic or
relatively elastic? State why. 2. Would the supply for the Wii console be
relatively inelastic or relatively elastic? State why. 3. Draw the demand and
supply curves as you have described them.
4. Was the severe shortage for over two years an old marketing ploy
called intentional scarcity, in which a company purposely keeps its hot product
in short supply to build buzz. Or was it simply bad planning on Nintendo's
part? What did this mean for households? What were the implications for
5. Can you suggest a reason why Nintendo dropped the price of the Wii
Console in late 2009? How would you expect this to affect revenues?