Thursday, October 05, 2006

More Toy Suppliers, Good News for Consumers!


Toysrus.com and Amazon.com are no longer partners in the online toy world. The two broke ties this past March due to a ruling from a New Jersey superior court judge who found that Amazon.com breached a deal to give Toy R Us rights to supply toy products as a third party vendor. Not only due these two vendors need to worry about each other this holiday season but from other stiff competition: target.com, walmart.com, and eBay; all of which are expected to be aggressive with discounting. As consumers the supply will increase, therefore dropping prices. We will also have a more assortments and services at our disposal. Would it be smart for Toys R Us and Amazon to team back up, or stay independent?

2 comments:

Cayli said...

It would be in Toys R Us' benefit to team back up with Amazon for this holiday season. If both companies were working together they would increase the toy supply for their businesses and be able to offer their toys at lower costs. Therefore, the supply would increase which in turn would in crease demand at a lower cost for the toys.

Greg Delemeester said...

Cayli, your economic analysis confuses the difference between a change in demand and a change in quantity demanded. If the supply of toys increases, then price will indeed fall. However, the drop in price will not increase demand--rather, it will increase quantity demanded (a movement down along the existing demand curve).