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Yeah, that doesn't allow for the real world fact that the market clearing price is actually a set of different prices varying by time and location because individual market participants have imperfect knowledge and also different motives. Nonetheless, the principle stands; there are no warehouses full of unsold Lego, so the market is obviously being cleared, and ipso facto it is not over-priced.
We seem to be talking at cross purposes here. I'm talking about LEGO at the RRP being overpriced, of course. Vast amounts of LEGO get sold at well under RRP, and very few sets spend their time on the market without being discounted somewhere along the way, often multiple times. If you include heavy discounts in 'different prices', of course you can say the market gets cleared at different prices, but my point was to say that it's overpriced not about discounts but about RRP.
By the way, there is at least one warehouse full of unsold LEGO; some sets that don't sell (and there are some in every year that attract little interest) get donated to charity. We had this last year:
I think there may be more than one like this, and probably others in other countries, but I can't find them now.
Oliver Schick-
I'm talking about LEGO at the RRP being overpriced
RRP is clearly not too much for some people, just as almost any discount will not be enough for others. If you're suggesting that the equilibrium price is around 80% of RRP, I'm not going to argue, but that's a pretty normal discount for all sorts of retail products, so it's odd to single out Lego
The throughput of that particular charity is of the order of one hundredth of one percent of total production, and not all donations of goods to charities are things which couldn't be sold; CSR and marketing will spend some of their budget on charity.
gbj_tester
Yeah, that doesn't allow for the real world fact that the market clearing price is actually a set of different prices varying by time and location because individual market participants have imperfect knowledge and also different motives. Nonetheless, the principle stands; there are no warehouses full of unsold Lego, so the market is obviously being cleared, and ipso facto it is not over-priced.
You might wish that they did something different, but they are not a charity, they are a business. The choice of how much to supply is set at the profit maximising level.
There are, as you say, cheap knock-offs for paupers. All the ones I've had my hands on are shit, but even shit faux-Lego is better than a lot of the absolute shit on the toy market 🙂