Demand and Supply

Grey goods A are substitutes of good A. On one hand,the demand for goods A has been increasing. On the other hand,keen competition from grey good A reduces the demand for good A. If the fall in demand due to keen competition from grey good A is greater then the increase in number of demand of A, the price of good A will fall despite an increasing number of demand of A.

it is because the startegy,
offical goods have warrant, is more desire than the unoffical goods at the same price,
after the price is decreased to $80~120, the grey goods A will also decrease their price to $60~80, mostly the grey goods still cheaper and still here, this startegy is to stop more grey goods come in to the market by decrease their profit or make them lost.
the demand of A is increased, because the price is decrease, there maybe have a excess demand, that depends on the value of the customer view is it change? for example after the market price is known as $80, the value of goods A in customer's view, it may be fixed, there is no chance to increase the price, the demand is still the same after that.
The reason of A's price keep falling with increasing demand, is not true, it still can use "demand and supply curve" to show that the price is quite fit to the market. First, the supply of A is increase by the import of grey goods. secondly, the price dropped, the demand of A (VALUE) is decreased, is a mental effect.




2011-05-16 22:15:55 補充：
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