The selling price of the Xbox One and Xbox One S was lowered by 17% of its release price from February 17th to 25th. Initially, they sold for $300 but between February 17th to 25th were lowered to $250. This is due to a decrease in demand. The demand determinant in effect was a fall in price of substitute goods. Sony’s PS4, a substitute for Microsoft’s Xbox One, offered a temporary price drop to $250 from $300 from February 12th to 25th. This shifted the demand curve for Microsoft’s Xbox One consoles to the left, resulting in a decrease in equilibrium price and quantity purchased. The supply curve did not change.

supply and demand4


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