<p>a lot of factors go into this. If a product in low supply and high demand suddenly becomes high in supply, with the same level of demand, as you mentioned, the price will in theory drop from \$1,000 to \$400. But the issue is the elisticity of demand, and the opportunity cost of selling the product at a lower price when demand rises. If the price is at \$400, and demand increases as supply dwindles, but there are substitutes to the product, consumers will simply buy the substitute. If there is no substitute however, demand is high, and price elasticity is high, the price can rise fairly quickly in that scenario. </p>

CC BY-SA 3.0
2018-03-12T10:14:15.703Z
2018-03-12T12:57:11.863Z
2018-03-12T12:57:11.863Z
Simeon Ikudabo
<p>It depends if it's expensive to warehouse or stockpile it. It depends if it will be just as useful in 1 year or 5 years time. </p>

<p>For example, you can stock a lot of iPhones in a small space, but no one wants to buy last year's iPhone. Whereas iron ores might be very useful in 5 years' time, but it would cost a lot to stock any relevant amount.</p>

CC BY-SA 3.0
2018-03-15T03:53:47.137Z
2018-03-15T03:53:47.137Z
nathanwww
<p>Let's say we have this Product A and it costs $1000, it's incredibly useful so it's in high demand, and we got it from a very-short limited-time "event"</p>

<p>But then it goes available again in high supply for another same "event" but a bit more longer so now prices drop to let's say $400 and we have high supply of it now</p>

<p>What is the most probable way that it will rise in price again, if it just takes time how long do you think would it increase price. Let's just say the product is incredibly useful and alot of people really want it.</p>

<supply-and-demand>
What happens if an expensive thing goes into high supply for a limited time?
Dudamesh 192
# What happens if an expensive thing goes into high supply for a limited time?

(Asked by: username_0 on 2018-03-11)

Let's say we have this Product A and it costs $1000, it's incredibly useful so it's in high demand, and we got it from a very-short limited-time "event"

But then it goes available again in high supply for another same "event" but a bit more longer so now prices drop to let's say $400 and we have high supply of it now

What is the most probable way that it will rise in price again, if it just takes time how long do you think would it increase price. Let's just say the product is incredibly useful and alot of people really want it.

**Tags:** supply-and-demand


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## 2 answers

### Answer by username_1 on 2018-03-12. Score: 1 | Accepted answer

a lot of factors go into this. If a product in low supply and high demand suddenly becomes high in supply, with the same level of demand, as you mentioned, the price will in theory drop from \$1,000 to \$400. But the issue is the elisticity of demand, and the opportunity cost of selling the product at a lower price when demand rises. If the price is at \$400, and demand increases as supply dwindles, but there are substitutes to the product, consumers will simply buy the substitute. If there is no substitute however, demand is high, and price elasticity is high, the price can rise fairly quickly in that scenario.


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### Answer by username_2 on 2018-03-15. Score: 1

It depends if it's expensive to warehouse or stockpile it. It depends if it will be just as useful in 1 year or 5 years time.

For example, you can stock a lot of iPhones in a small space, but no one wants to buy last year's iPhone. Whereas iron ores might be very useful in 5 years' time, but it would cost a lot to stock any relevant amount.


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