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Why Do Companies Charge More for Things That Are Rare?

Imagine you have a bag of candies, and only one is a gold chocolate. You probably want that gold candy more than the others, right? So if you're selling them, you can charge more for the gold one because it’s rare. This idea is rare item pricing, when things are scarce, people are willing to pay more for them.

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Examples

  1. A toy store sells only 100 special edition action figures, people are willing to pay more for them.
  2. You can buy a ticket to see your favorite musician, but if there are only 100 tickets left, they might cost twice as much.
  3. Gold is expensive because it's not easy to find everywhere.

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Categories: Economics · scarcity· pricing strategy· economics basics· supply and demand