Tuesday, September 6, 2011

Nice example of Complementary Goods---HD TV and Make-up Artists..

Today in class we started our unit on the basics of demand and supply.  I always do demand first because intuitively it is easier for students to understand---they are mainly consumers at this point in life. 

We covered briefly the definition of Complements---two goods that are separate and distinct but are most often used in conjunction with each other.  In general, there is as inverse relationship between the price of one good and the demand for the complementary good.  Below, from the Freakonomics Blog, is a timely reference to complementary goods that is a bit unusual---HD TV and Make-up artists.
Because of the high resolution of HD, every imperfection in skin and hair is magnified.  It has created a surge in the demand for make-up artists.

The price of HD TV (both to broadcast and the price of the TV's) has decreased as it saturates the marketplace. As more broadcast outlets adopt the format more of the goods and services, like make-up artists, that complement it will be in greater demand...

Does HDTV Increase Demand for Make-up Artists?

"A major technical change in TV has been the introduction of HD broadcasting and receivers. For the same price you get higher quality, so this can be viewed as a rightward change in supply. This change has affected a surprisingly related market—that for make-up artists.

Now if you’re on television, as I discovered, every single “flyaway hair” is visible. Most of my hair flew away many years ago, but what’s left might still stick out and need careful laying down by a specialist. A make-up artist tells me that demand for her services has been helped tremendously by the introduction of digital broadcasting and HD receivers."
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