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Choosy Consumers Make Choices

Manufacturers had a record-breaking cycle, selling 25% more units than the last cycle.  However, revenues rose by only 0.2% as average prices of most goods fell.  Macs sold for an average of $1.73 while Lyons sold for $1.54.  Prices in the painted product market were relatively stable, with Painted Macs selling for $3.22 and Painted Lyons for $3.24.  Prices for Luxury Macs dropped dramatically to an average of $6.98 while Luxury Lyon prices fell by just $0.02 to $6.49.

As customers start to show clear preferences for some firms’ products, manufacturers are experiencing either surging or declining demand based on their popularity.  Generally, the less popular a company is, the lower their prices will have to be to compensate.  This is particularly true for product markets with less competition.

With interest rates increasing, it will be interesting to see if consumers continue to spend with such abandon.

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