Question

Last year, the "Milligan Shoe Company" had lack luster sales. Instead of making cheaper shoes, they decide to pay Superstar Bad Bunny and his friend superstar Sam Gault to wear a new colorway (color shoe) to their concerts and events. They know this will make people want the shoes, but instead of making their usual 25,000 pairs of these shoes, they only make 2,500 of this color. They then sell them for 5 times the cost as the normal pair. This works because the Milligan Shoe Company has created a (1 point)
Responses

superior product
superior product

a scarcity
a scarcity

net loss
net loss

Trade off
Trade off

Answer 1

a scarcity

By producing far fewer pairs (2,500 vs. 25,000) and creating high demand via celebrity exposure, they intentionally limit supply so the shoes become scarce, allowing them to charge much higher prices.