Daily Speculations
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James Sogi
Philosopher, Juris Doctor, surfer,
trader, investor, musician, black belt, sailor,
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(address is not clickable)12/25/2005
Christmas Tree Supply/Demand Curves
On December 22 we were belatedly searching for a Christmas tree. Every two years there is a cycle: too many trees one year, then when the merchants have excess supply, the next year they cut back and there are too few trees. The first three places we went to were sold out. Finally we called Home Depot and the friendly sales rep told us that they had just marked their trees down to $9.99 and they had Noble firs. We went there and there were many trees left, nice ones, all different types. We got one of the nicest, biggest trees ever for only $9.99. We laughed about the incongruous idea of getting two since the price was so low. I pondered the supply/demand curves and how demand dropped off a ledge to zero as Christmas came and went. I pondered the odd thinking behind reducing the price of the trees since we, and most anyone who did not have one and who wanted one, would pay the full retail markup to get one. The reduction in price did nothing to increase the demand since no one is about to buy two Christmas trees.
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