goods + economics?

Question

what's it called when suppliers only give a limited amount to stores (ex is the ps3 and wii)...and why do they do this?

Answer 1

It's just called rationing. It's done because of limited supply. It takes time and resources to make stuff, and for something popular like the PS3, the supplier is not going to be able to meet the initial demand, so the company will have to ration the goods out to stores according to some marketing or channel plan.

They might build a lot of buzz when the devices are sold out. But that's not why they do it. They'd rather have the cash from selling the product -- that's why they're in business -- rather than let individuals on eBay score huge profits.

Note how Microsoft on something like the Vista launch -- Microsoft can easily print plenty of CDs when its software is finalized without worrying about component shortages -- blitzes retail stores with all the software people can buy. No shortages. They do that because they CAN: producing CDs is the easy part.

Answer 2

Limited supply. That is supply based price inflation.