A crash course in economics will teach you that once a product is in high demand, the cost of the product generally drops. In today's economy, this is not always the case. Here is a look at five products that should be getting cheaper, but for various reasons are not.
SEE: Introduction To Supply And Demand
If you are one of the consumers that is waiting for Apple to reduce its prices don't hold your breath. While Apple products are overwhelmingly high in demand, their competition doesn't hold a candle to the popularity of Apple. Apple is able to price its products as it wishes without major backlash or repercussions due to the company's tremendous popularity in the market. Even though Apple products are expensive, they are very reliable and usually last for a long time. They also have fairly high resale values, so if you upgrade you may be able to get a decent price for your old MacBook or iPhone.
Professional Grade Computers
You'll be hard-pressed to find someone that does not own a computer. Whether it is a laptop or desktop, professional grade computers are still relatively costly. While professional grade computers are high in demand, the technology keeps evolving which is the reason why these computers are not getting any cheaper.
Another product that seems to be getting more and more expensive, rather than cheaper, is video games. Games for Xbox 360 and PlayStation 3 (PS3) both have a price that averages around $60 each. Nintendo Wii games are slightly cheaper and on average are priced between $40 and $50. Additionally, in an interview with Eurogamer, THQ said, video games may cost around $100 each on the next gaming system. The next generation consoles are expected to increase graphic performance and over all power, which means developers will need more resources to product these video games. The increased need for resources will in turn increase the cost of video games in general. Next generation consoles are also rumored to have restrictions which will prevent used games from being used on the systems. This may make gaming on the next generation Microsoft and Sony machines even more expensive. The reason for the hike is because of the advancing technology. Video games have come a long way since the days of the original Nintendo, and the price certainly reflects this.
Walk down a busy street on any given day, and you're bound to see an overwhelming array of cell phones. Some are standard cellular phones that can be used for talk and text, while others are essentially mini computers that you can talk, text, surf the Internet and compute on. The reason many cell phones are not dropping in price is due to the evolving technology. Many cell phone carriers allow you to trade in your phone for a new one every two years. What is the point in reducing prices if you can make a larger profit by keeping sales the same or higher? As long as cell phone technology keeps evolving, expect the prices to stay high.
When Blu-Ray players first came out on the market, many consumers believed that this technology would replace the DVD. As of 2012, this vision has not come to fruition. Although the Blu-Ray technology is popular, it did not catch on as well as expected. If popularity increases, expect the price of Blu-Ray players to drop, but until then, prices will likely remain the same. However, there have been price decreases in some blu-ray players. In general they are still more expensive than DVD players and have not made DVD players obsolete as of yet. Because of the PS3's ability to play blu-rays, some people are using the game console as a blu-ray player with the added benefit of being able to play video games for $100 more than the price of a cheaper blu-ray player.
The Bottom Line
Due to technology constantly evolving and demand increasing, many products on the market are maintaining their prices rather than dropping. Although high demand usually causes prices to drop, the evolving technology component is what keeps the prices steady.