#econ23econlive

In the past year or so, I’ve gotten myself into the hobby of collecting and writing with fountain pens. To me, the benefits of fountain pens are the smoothness of writing, the ability to write with as little pressure as I want, fewer hand cramps when writing in cursive, and the elegantly intricate design of the nibs.

In the past few decades, the demand for fountain pens in the United States has declined, mainly due to the introduction of a substitute good; disposable ballpoint pens. A far cheaper alternative, disposable pens be found all across the United States in schools, offices and wherever a pen is needed. For reference, 60-pack of BIC Round Stickers Xtra Life ballpoint pens will cost you a THIRD (roughly 7 dollars) of an entry level fountain pen. Despite this, many countries around the world, such was Switzerland, Japan and Germany still use fountain pens and some even require it in lower level education.

The prices of fountain pens vary from brand to brand, with some, such as Pilot and Kaweco, offering entry-level pens at around $20 and others, like Montblanc, providing high-end luxury pens above $1000 dollars. The reasons for these prices is due to the average total cost of producing these pens, with most pens using steel nibs and plastic feeds while others opt to use more costly materials such as gold nibs and ebonite feeds. The fountain pen market has many companies such as Pilot, Sailor, and Kaweco, each producing similar but differentiated products. Because of this, the fountain pen market should be considered a monopolistically competitive market.

Additionally, fountain pen enthusiasts are able to buy, sell, and trade pens with other enthusiasts. This can come in handy since many fountain pens simply aren’t produced anymore. A wonderful example of this is the Pilot Myu, a sleek design with an integrated fountain pen nib, it is a prized addition to any fountain pen enthusiast’s collection. Unfortunately it was discontinued long ago and with the drop in supply, the demand for such a pen has risen significantly alongside the price.

Fountain pens also contribute to several other markets, by increasing the demand for other complementary goods. These include fountain pen friendly notebooks that prevent bleed through and feathering of ink, as well as bottled inks and pre-filled ink cartridges that allow for unique colors and customization within one’s writing.

The impact of using fountain pens is nothing grand, it won’t solve world hunger or end wars. It does however, contribute far less to the pollution caused by disposable plastics. Most fountain pens are made of materials that will last lifetimes if cared for properly. The nibs and feeds of fountain pens can also be replace if damaged, or can be sent to a ‘nibmeister’ to be repaired. Additionally, pre-filled ink cartridges can either be replaced by ink converters to use bottled ink, or can simply be refilled with a syringe, resulting in far less plastic waste compared to the disposable ballpoint pens mentioned earlier.

Mark Rangel

20875590

When I was in Vietnam:

I was born and raised in a suburban area of Vietnam. As a citizen of a developing country, I learned and witnessed many things in Vietnam's economy that clearly mirror some concepts of economic class. The story is about the ice factory:

I remember there were only two ice factories in my area (around a radius of 20 miles). To earn more and control the market, those companies formed a cartel. In that summer time, during those first several months, customers had to pay a large amount of money to get ice from them since they were monopolies in my small market. Due to the heat, demand remained high at that time, they earned a lot of money by forming a cartel. The event lasted for two months until I saw a conflict between those two factories when both sides fought each other (it was normal in Vietnam). I and my mom were there watching them and found out that one of the factories was cheating by offering wholesale buyers (from restaurants) a better price so they can attract wholesale people to earn more without letting the other company know. After taking this class, I can tell that they broke the agreement when in cartel form

(Source: Internet)

When I move to the United States:

a. The egg market:

I have been going to the gym for eight years, so I care a lot about my protein intake. There was an event back in mid-January when it rained for weeks. Consequently, it affects the egg industry, and the event cut down a big amount of egg supply. The price doubled from $15 to $30 for 60 eggs. The egg market is a competitive market where there are many sellers selling identical products, and they are also price takers. When the supply decreases, the supply curve shifts backward which causes an increment in price and a reduction in quantity with the unchanged demand curve.

b. Pfizer vaccine:

I’m also playing stock. Pfizer is one of my favorite stocks back in the pandemic time when I have to stay at home and wanted to make some side hustle income. The vaccine industry in the pandemic is a typical monopoly or oligopoly in the short run and a competitive market in long run. 

First of all, before covid time, the world was racing for vaccines so we could resume to new normal life. Pfizer was a big winner during that time. Its stock went from $26 dollars to $60 dollars in one year and a half (2020 to mid-2021), which shows how much the world cared about vaccines at that time. After being announced that Pfizer’s covid vaccine is approved by FDA, its product price skyrocketed, and the government had to intervene to support the people to afford the vaccine. At that time, Pfizer was a monopoly, and it can control the price as it wanted. It turned out that the amount of vaccine produced didn’t match its huge demand. Below is the graph to demonstrate the market power of Pfizer at that time:

Secondly, after prevailing in the market for weeks, companies finished launching their products and entered the market. The vaccine market started to become a competitive market. Due to the increase in supply, its curve shifts forward. Since companies are price takers when the market is competitive. Vaccine prices have been decreasing since better technology, and supply is more and easier. Luckily, by being affected by the competitive market model, the vaccine is now more affordable to peoples without government support (it also take a lower toll on health insurance). Below is my presentation about the event:

Vo Nguyen #69838249 

Last year in March, the world as we knew it went topsy-turvy. Everything from lecture halls, retail stores, and restaurants were promptly vacated as the world we knew so well was locked down. Luckily, through the internet, we were able to sustain our need for education and consumerism. While online shopping always existed, it was apparent that the lockdown catalyzed the transition to a more digital world. Due to the lockdown, I moved back home and had to resign from my current part-time job. While searching for employment, an idea came to me how I could synergize an average minimum wage college gig with a business of my own that would allow me to take advantage of the recent increase of online consumerism.

As society slowly regained access to what life was like before the lockdown, I was given an opportunity to act upon my idea. Being newly employed at a retail store has its many perks including having early access to incoming inventory and a chance to purchase products at a cheaper cost was key for my side hustle and gave me an advantage over the standard customer. Exploiting this, I was able to start a risk-free online side hustle in which I would resell various in-demand products sourced from my place of employment and simply return any inventory that did not sell.

Particularly, I found the resale of Rae Dunn pottery especially lucrative. You see, Rae Dunn was an artist whose work embodies simplicity and the perfect imperfect which is why her pottery continues to be so sought-after. It is not only the appearance or design that inspires admirers of her work to collect and trade items, but also the competitiveness that comes from the thrill of the hunt.The high demand for the pricey pottery, combined with my ability to swiftly source it for cheap made this venture very exciting.

As you may have already gathered, my side hustle involves the reselling of products from my place of employment at competitive prices most other resellers cannot affordably match. The resale and upsell of sought after goods (such as limited edition and seasonal products from shoes to coins) has always existed physically and bow more so progressively virtual as well. Since many people are still hesitant about leaving the house to engage in leisure activities that could be performed safely online, the online market customer base has not suffered the slightest. The rarity and scarcity of certain Rae Dunn products is why buyers are willing to pay double, triple and even dectuple of the original retail price of an item they so desire. The initial hype for Rae Dunn caused crazed consumers of her artwork to wait in early morning lines before opening, visiting multiple stores a day, and frequently checking if stores had been restocked. The pure efficiency and ease of access of the online retail market, surprisingly, draws consumers that are willing to pay more for a product online than it costs in-store.

Two recent listings sold on Ebay from the limited edition Halloween collection.

So...how does this relate to economics?

Reselling requires an understanding of the current demand for certain products, lest one will buy products that won’t sell. Even though Rae Dunn has a range of products that people are insisting on purchasing, not every one of her pieces of pottery is filled with gold. For example, her more ubiquitous pieces will still sell, just at a slower rate and for less profit. However, her more sought-after pieces, such as limited edition Halloween and Christmas collections have been shown to sell for almost dectuple their original retail prices! Products with a much lower supply and high demand sell much quicker for a much higher price than products with a greater supply and lesser demand. This can be illustrated in the graph below as supply remains unchanged and demand increases upward, price will also shift upwards. It is essential to check your current platform of resale (ex. Ebay, Mercari, Esty, etc..) before purchasing for comparables to ensure your intended item isn’t oversaturated in the market and the potential profit is worth your time and effort.

Is upselling unethical?

Ever since high school, I’ve familiarized myself with the art of reselling and marketing primarily focusing on cleaning out my closet of gently used clothing. It wasn’t till I moved back home, due to Covid, that I turned this hobby into a side hustle; scouting out desirable goods and making a decent profit from my earnings. Although the reselling of goods has always existed, I’ve read articles and even questioned if upselling is ethical. Some suggest mass production would eliminate upsellers, however that would diminish the value and the novelty of the thrill of the hunt for so many collectors (aka dunners). As such, upselling is usually relegated to collector’s and small specialty/luxury markets, markets in which the consumer isn’t purchasing exclusive products essential for their livelihood, but for their pleasure. Given the consumer has the option whether to pay for expensive, collector’s item pottery or cheaper, more practical pottery at half the price, there is little moral quandary in reselling products in this manner. The main argument that holds in opposition of upsellers is that they’re “greedy shelf clearers” driven by profit that take away the fun of the hunt for collectors. I can understand both positions and only take a few items here and there, but considering the opportunity costs for both the buyers and sellers they come to equal out. The opportunity cost for the buyers is the higher amount of money spent on that good, while sellers also have a variety of factors included. The buyer's opportunity cost includes the cost of gas, the time spent searching and shipping the item, and additionally the shipping supplies used (especially due to pottery’s fragile nature). Due to the company's inconsistent and fluctuating stock, it is sometimes easier to purchase these goods from resellers, saving your time and effort.

Student: Camille Chihak ID#: 20343423

Econ Live Winter 2020

$2 Dollar Nutella Crêpes? Sweet deal!

Just the other day I went to one of my favorite crêpe shops, Crêpes Bonaparte (located in Fullerton, CA). As soon as I walked in I was greeted with signs saying that the Nutella crêpes were on sale that day for $2 because of their 2 year anniversary opening up that particular location. Usually the Nutella crêpes are $5.50 (which still isn’t very expensive), but when I saw that kind of discount I had to take advantage of it, being a big fan of Nutella and all. I ordered it and it came to me within a few minutes or so, and I gobbled it up! Mmmm mmm delicious. But that got me thinking, such a price reduction must have an effect on the amount of Nutella crêpes demanded by customers, right? And indeed I was right. Almost every other person who ordered after me saw that sweet deal and took advantage of it as well.

I demand more Nutella Crêpes!!!

Let’s say that, on average, the demand for customers coming into the shop amounts to about 8 Nutella crêpes per hour when the price is $5.50 each. According to the Law of Demand, as the price of something decreases, then the amount demanded increases, which means that the demand curve is downwards sloping. This can be seen on this graph I created here, where when the price decreases to $2 dollars a Nutella crêpe, then the quantity demanded increases to 11 crêpes per hour:

This shift on the demand curve is a perfect representation of the Law of Demand. I found it quite fascinating when I saw this occur right before my very eyes. I only learned how it worked graphically/logically, but seeing it happen in real life was amazing, and is exactly what inspired me to make this post. It really puts things into perspective...how economic principles are constantly surrounding us without necessarily being super obvious. Thats why economics is a “social science”; it’s a natural science of the world that is a consequence of human interaction. Anyways, I thank you for reading this post and take advantage of any sweet deals you find near you, particularly if they involve delicious Nutella crêpes!

Emre Erdogmus

Erling Eriksen (#94614808)

Econ 23

Avocados are a staple of mine and many other Californians diets, whenever possible I will try to get avocados or guacamole with chips. Avocado imports have been steadily increasing and a stain on California agriculture conditions is only making this worse.

Figure 1.

The United States gets almost 80% of its avocados from Mexico according to Forbes, because they have a more suitable climate to grow most kinds of produce. Mexico can grow avocados year-round unlike the rest of the U.S., so to meet domestic supply, avocados must be imported into the United States from Mexico. Although it has not happened yet, president Trump wants to enact a 20% tariff on goods coming from Mexico in order to pay for his border wall. Trump’s 20% tax will increase the price of many goods that come from Mexico, such as cars, appliances, and produce; this means increased avocado and guacamole prices. Although this would be good for domestic producers of avocados, because it would increase the prices they could charge for their avocados from P1 to P2 and thus increase producer surplus from G to G+C as show in figure 1, it would be bad news for people like me who love avocados. The increase in avocado prices might lead many restaurants to use less or no guacamole altogether.

Figure 2.

This 20% tariff on Mexican goods would only be making a bad problem worse. Because imports from Mexico would be taxed there would be a decrease in the total quantity of imported Avocados. This would put a great strain on Californian producers to meet the demands of U.S. consumers, but this would be difficult considering recent agricultural stresses. In recent years, climate change has caused a lot of problems for avocado farmers both domestic and foreign. Most avocados in the U.S. are grown in California, because it had the most suitable environment, but heat waves and droughts have taken a toll. According to businessinsider.com, record heat waves and drought of 2016 have lowered avocado production along with an invasive species of beetle since 2012. This will shift the domestic supply curve to the left, decreasing the equilibrium quantity of avocados and increasing the equilibrium price.

Figure 3.

Although Trump’s plan was to “make Mexico pay for the wall”, ultimately the people in the U.S. will have to pay for it through higher prices in all goods coming from Mexico including avocados. A combination of this tax and the recent environmental changes to domestic production in avocados will make the prices of avocados rise. Domestic producers are already struggling to produce the same amount in this climate, but if they are to meet domestic demand they will need to increase production even more. If this 20% import tax on goods from Mexico is enacted, people who love avocados and guacamole as much as me will undoubtedly suffer the from higher prices and less consumption.

Work Cited:

“Graphs Showing Agricultural Trends.” Big Picture Agriculture. 3 May 2016, Web. 12 March 2017.

Bryan, Bob. “Trump press secretary says the administration is considering a 20% border tax on Mexican imports to help pay for the wall.” Business Insider. 26 January 2017, Web. 12 March 2017.