MicroEconomics Supply and Demand - Essay Example

The world’s leading brands are accessing the Japanese departmental stores to sell their limited edition products. The sales of chocolates in the Valentine season pick up like anything. Primary Economic Elements The soaring demand for chocolates in Japan near the Valentine season presents a positive opportunity for the local and international Chocolatiers. It is not that the Japanese are particularly fond of chocolates. In general, the Japanese are not avid chocolate fans and their panache for the local delicacy “Wagashi” does tend to have precedence over chocolates.

However, the Valentine’s-Day celebrations are a different thing. The contemporary Japanese youth closely associates the Valentine season with love and romance and the consumption of chocolates registers an exceptional spike in the Valentine’s season. Not only the local Chocolatiers do their best to profit from this surge in chocolate consumption, but the Chocolatiers hailing from around the world, including Belgium, Switzerland and other European countries do know well that during this time of the year, the price is not a big consideration for the local chocolate lovers.

The demand for chocolates in Japan during the two weeks preceding the Valentine’s-Day augments to the extent that it is getting really difficult for the suppliers to import and manufacture a commensurate stock. Most of the malls and departmental stores do run out of stock just a few days before the Valentine’s-Day. The sales of chocolate that rest at a conservative monthly average of 34 billion yen during the regular season incredulously soar to 55 billion yen during the valentine season.

People do not hesitate to buy boxes of chocolates costing as high as 28, 350 yen or $ 340. The Chocolatiers play on the fantasies of the consumers by offering variations like chocolate doll houses and even chocolate furniture costing 10, 000 yen a piece. The foreign and local Chocolatiers leave no stone unturned to accrue sales from niche segments that have a particular predilection for “Kawaii” chocolate, exchanged amongst women as a part of a local custom, comprising of a menagerie of chocolate animals like chickens, flying pigs, bugs and bunnies.

This trend for chocolate is expected to become stronger in the times to come. The global players in the chocolate business have already taken cognizance of this fact. Graphical Analysis During the regular season, the demand for chocolate in Japan, as any other perishable consumer good is price elastic and follows the classic law of demand. As the Price of chocolate increases from P to P’, the demand for chocolate falls from D to D’. Besides, people start opting for local substitutes like Wagashi.

Price of Chocolate P’ P D1 D’ D Units of Chocolate During the Valentine season, the things are different. The increase in the demand for chocolates moves the demand curve up along the supply curve from D1 to D2. This movement along the supply curve gives way to a new equilibrium price. This not only leads to an increase in the price of chocolates, but also results in a commensurate increase in the demand for chocolates. The Chocolatiers can benefit from this situation by pouring in more supplies in the Japanese markets.

Price of Chocola