Economics of the Hockey Equipment industry?
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05-27-2010, 04:16 PM
Join Date: Jul 2007
Location: St Paul, MN
Price setting as in, each firm has such large market share that they can impact prices, and with an oligopoly it's even more so. I'd imagine with this paper you'd want to follow the template of state your thesis, define an oligopoly, show how the firms fit the criteria of an oligopoly, then get into the meat of the supply/demand, right? I'd probably focus on a few of the criteria (instead of, say going through a dozen reasons why it's an oligopoly), and I'd imagine the price setting would be a large one since that's most of your paper's content.
Anyways, I'm not sure exactly how you would depict that kind of price movement, but you could probably find similar papers regarding the auto industry. My guess would be the supply curve shifts to the left, because when they introduce a new technology, the marketing, R&D, and retooling costs would justify the price increase, hence an increase in production costs would shift the curve to the left. But the inelastic demand curve means players are still buying the gear in close to the same amount even at the higher prices.
And since you're talking about oligopoly pricing, you'd want to look at the market S&D model rather than worrying about brands...usually when looking at a specific firm you'll do more cost and revenue analysis.
If you couldn't tell, six years of studying economics and a degree in the field with pretty high marks
EDIT: The more I think about it, the demand curve would be drastically inelastic...but I would talk to a hockey shop to gauge that. Also, an idea of guessing the number of sticks purchased per player, if you could figure out how many sticks are sold, see if you can find the number of registered hockey players in that market. So if units sold went up 10% but registered players went up 20%, that would affect the curves a bit and would indicate more of a drop in quantity demanded depending on the average retail price, etc.
Last edited by Jarick: 05-27-2010 at
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