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Old 03-06-2008, 03:27 PM
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Default Cornering the market on one card?

Posted By: LetsGoBucs

Depends on the steepness of the demand curve.

Hypothetically the "price" of a card is at the intersection of the supply and demand curves. At a certain price more people will sell their cards (increasing supply) and at lesser prices more people will hold their card as they prefer the card to the money.

If at the top end of the curve there are individuals who would pay many times what the market price is then you have the potential to earn "economic rent" - or profits. Your challenge though will be to find those buyers at the top and you have to assume they remain in the market over time.

The poster who said you'd have to use time as one of your elements is correct. New buyers represent new points on the demand curve and they will view the market differently that older buyers.....there is a "stickiness" to prices because existing buyers have an emotional element about seeing prices change. New buyers are less emotional about the price as they have no previous reference point.

Cornering the market and profiting is difficult to do. You really need to find a good that is either providing much greater value to the consumer or a key component in a high margin product produced by businesses. So if some material xyz was a key component in making widgets but only made up 5%of the cost of the widget, and widgets had a gross margin of 80%, businesses would still pay four or five times the existing price for xyz (assuming no substitute). On the consumer side, substitution usually results as consumers buy something else to give them enjoyment or take care of whatever task the item helps them with.

In the example of the Lindstrom card, most people simply accept their sets complete without it and move on with life - I would expect that the same is true with most cards.

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