“Supply and demand” are two of the most well-known words in economics. Simply put, “supply” is the amount of something that is available, or can be made available, to consumers. “Demand” is how much consumers want or need a product. When there is more supply than demand, prices fall to induce consumers to purchase the excess supply. When there is more demand for something than available supply, prices rise. There are two reasons for this: first, there may be a shortage of the product and the retailer will probably have to pay a lot to replenish it; and/or two, the retailer can simply increase their profit margins by increasing the price, since people are willing to pay for it. On the other hand, if the price of the product increases too much, demand will decrease, which will once again bring supply and demand back into balance (Rittenberg & Tregarthen, 2009). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay A popular time of year where we often see supply and demand come into play is the Christmas season, starting with Black Friday and continuing all the way through returns and gift exchanges after Christmas until around New Year's Eve. Every year there seems to be some new "must have" item. It is often a toy. Children learn about it at school or from television, talk about it with their friends and then put pressure on their parents to provide it for them. (Sometimes, however, parents can be just as guilty as children when it comes to consumerism: a parent might decide that their child needs to keep up with the Joneses and have the latest and greatest toy or electronic device.) This send message parents are scrambling to track down the item in time for the holidays, while thousands – if not millions – of other parents across the country are doing the same thing. As a result, the demand for this product becomes very high, and as stores begin to run out frequently, the supply is very low. We saw an example of this as recently as December 2016, when the "Hatchimals" phenomenon began to make its way across North America - and even other parts of the world! “Hatchimals” are furry, robotic, interactive animals that will hatch from an egg that the owner will need to rub to facilitate the hatching process. Additionally, creatures continue to “grow” and increase in size as time passes. These are truly revolutionary in the world of children's toys, and as such come at a pretty revolutionary price: around $60 each! This hasn't stopped many parents from hunting down this toy and snapping it up, but many opportunists have begun finding and purchasing Hatchimals in large quantities and selling them on sites like eBay for triple the price. Here elasticity began to come into play, as many parents were unwilling to pay the inflated prices for the toy and consequently stopped looking for it altogether. As a result, after-sales demand from sites like eBay and Amazon has dropped significantly; However, the demand to purchase the toy at a retail price from stores such as Target and Walmart has remained on the rise (Peachman, 2016). Spin Master, the maker of the Hatchimal toy, said he knew the toy would be popular, especially around the holidays. They produced extra Hatchimals to meet this anticipated demand. However, they said they didn't expect such an overwhelming response and, as a result, have struggled to keep up with consumer demand. Business costs have increased for Spin Master, as it has had to 5-10.