If you’re looking for some current issues to help illustrate your discussions about prices (how they are set, how they influence behavior, how they are influenced by behavior, how they act as a rationing mechanism, etc.) you could do worse than a couple of stories that have popped up over the past few weeks. You probably are already using them, but just in case they’ve slipped under your radar, here they are.
The first was in The New York Times about three weeks ago. The story is about how chicken wings, that finger-food favorite and former loss-leader for sports bars, have now become more expensive than boneless chicken breasts, the former gold standard of the poultry market. The story offers opportunities to move supply and demand curves, discuss cost/price issues, and even talk about substitutes, elasticity and inferior goods.
The second story was in The Wall Street Journal about a week ago. (I wish I could tell you with certainty that it’s free content. Sometimes it is. Sometimes it isn’t. If you run into a “subscriber content notice”, insert “Amid Price War, Three Retailers Begin Rationing Books” into your browser. You should be able to find the whole story. If that doesn’t work, the basic story has been covered by other news outlets like this segment from CBS News.)
It seems that traditional book-sellers are up in arms because Wal-Mart, Amazon and Target have started a price war, and newly released and soon-to-be-released popular books are the ammunition. That’s to be expected. However, the three sides in the war are discovering that “price acts as a rationing mechanism” and have had to decide how to distribute the goods when price is “below market.”
Let me know how these stories work. Or if you are already using them, please share your experience with other readers.