Taylor Swift fans recently descended on Tampa, Florida for three nights of concerts. In addition to seeing the live performances, many fans were seeking to get some of the coveted Taylor Swift branded merchandise. One of the most prized items was a blue, crew-neck sweatshirt with the Eras Tour logo on it. Fans waited outside in the rain for several hours for the chance to be one of the first customers at the merchandise trucks. One fan reportedly arrived around 2a.m. and spent the night under a truck waiting for the merchandise trucks to begin selling at 10a.m. Another fan reportedly skipped school for the chance to buy the sweater, declaring, “There’s no way I’m missing merch just to go to school.”
Some of the sweaters, which retailed for $65, would later appear on eBay and other resale sites for up to $300, nearly four times the retail price. To make sure as many fans had the opportunity to purchase the sweater, vendors put a limit of 2-per-customer. Despite these efforts, within an hour of sales beginning rumors began circulating that the sweater had sold out, leaving fans to settle for other merchandise like T-shirts and water bottles. Hopefully, the fans won’t develop Bad Blood over the experience.
Discussion Questions:
- Given that the vendors had to put limits on the quantity of sweaters sold, what does this say about the posted retail price relative to the potential equilibrium price?
- Discuss the opportunity costs associated with waiting in line for several hours to purchase a sweater.
- Draw a supply and demand model to illustrate the market for Taylor Swift sweaters, indicating whether the retail price is set at, below, or above equilibrium.
Sources| NY Times: https://www.nytimes.com/2023/04/19/style/taylor-swift-mania.html; Photo by Anthony DELANOIX on Unsplash