emeka206

That's sad

ufmike316

I know everyone thinks the dealerships are "ripping people off" due to the tragedy; but in reality, it is just the most fundamental law of economics at play: Supply and Demand. The entire purpose of discounts and incentives is to increase demand to meet the level of supply. Due to the earthquake/tsunami, there are not enough parts being manufactured to produce cars at full capacity. As a result, there is far less supply in the market. With less supply, there is no need to increase demand with discounts or incentives. Why sell every car you have at a huge discount when you cant replace them? This doesnt just happen with cars, it is with any commodity. Look at any collectible item. the value is not related to the cost to produce it, it is determined by the rarity of the item.

By definition: The four basic laws of supply and demand are:
If demand increases and supply remains unchanged, then it leads to higher equilibrium price and quantity.
If demand decreases and supply remains unchanged, then it leads to lower equilibrium price and quantity.
If supply increases and demand remains unchanged, then it leads to lower equilibrium price and higher quantity.
If supply decreases and demand remains unchanged, then it leads to higher price and lower quantity.