08S7B trailblazers

When life gives you lemons, you make lemonade.

Geez, what an appropriate title for a post like this. maybe this quote was inspired by the game itself hee.

Anyhow, i was just thinking about this game, and as i can see it really does have quite a lot of economic relevance. The idea that everything you do affects the quality of your product, and therefore differentiating it from the one in the market. And of course, the key factor in this entire game is based on Price Elasticity concepts (well, at least more than the other elasticity concepts which i will be elaborating on later). Here, it seems really difficult to determine the price elasticity of the lemonade in the game until you actually try it (and hence being able to determine the result through varying the prices in the game and see how your quantity demanded changes). Typically, lemonade being not quite an essential, unless the weather is horribly hot and you're desperately in need of something cooling, it seems quite elastic - change quantity demanded varies more than proportionately with change in price. The game is interesting because it takes in weather into the equation as well, which can be a determinant of price elasticity, as mentioned earlier! Quite cool, huh!

But the fall back is that cross elasticity concepts and income elasticity concepts wont be as useful. The income of the customers are not displayed, and neither are changes in their incomes. The game also assumes no competitors, or at least you wont be able to check the status of your competitors. which means, these 2 concepts are effectively not applicable. Supply elasticity, however, if more useful. Due to the nature of lemonade, both in and outside the game, you can react really quickly to demand changes since the time taken to make lemonades is really short. the resources needed are also easily available. This means that supply can change more than proportionately with changes in price. however, this does not really tell us much, other than that you can quickly change supply to meet demands ie. change your supply on the next day if demand increases.

And so, i was thinking, how cool it would be to play a real-life lemonade stand game, with all the other classes! like. each class can be in charge of a lemonade store (perhaps online? or not?) and hence there will be cross elasticity! And income of customers can be manipulated by the game master (econs tutors?), so income elasticity comes into play as well! So letsay every term classes earning subnormal profit will be eliminated, the number of classes remaining in the game will slowly decrease! perhaps to the stage of an oligopoly? an alternative would be to simulate perfect competition! Where there is freedom of entry and exit, so classes who have been eliminated can return into the game to take away the supernormal profits of certain classes, so that in the long run, there will be normal profits. And of course, we could throw in numerous variables such as weather changes, economic recessions, freak lemon plantation failure, etc etc. And include mergers/acquisitions at some point in the game! Ahah okay now this whole idea sounds really complex xD Point is, simulating such market games will really let us understand how elasticity concepts work, what happens in a certain market structure, and how to determine prices!

A bold suggestion (:

posted by Jia Wei @ 9:58 AM