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Demand

In 1958, Wham-O, Inc. began marketing the Hula Hoop in the United States. Sales of the Hula Hoops skyrocketed during the year, in the first months over 25 million were sold, within the year over 100 million. In 1994, the film The Hudsucker Proxy portrays a fictionalized account of the demand for Hula Hoops as they were introduced into the market.

Watch this clip from The Hudsucker Proxy and discuss how the supply and demand for Hula Hoops interacted with prices.

Initially, the store keepers were dropping the prices (A movement along the demand curve) Since no one wanted the Hula Hoops at lower prices, what might this indicate about the Demand Schedule?

What function (determinant) cause the change in Demand?

How did the change in Demand change the price of the item?

Predict what will happen to the market for Hula Hoops in the near future. Comment on the Market Supply and the what the Wham-O company should do.

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