Initially, GoGo Gadgets enter the

market at 25$/ gadget. This graph

shows the market initial market
equilibrium (A) created.

Endorsing the celebrity attracts

people towards the product, thus
shifting the demand curve to the
Shortage right (D2). Since, the price of the
product remains unchanged, the
demand is more than the supply,
thus, creating a shortage. The
sudden increase in sales can be
explained by this.

The price of the product is increase

beyond the equilibrium, where the
Surplus supply is more than the demand,
creating a surplus. Thus, the
perception of decreased sales, or
overhead inventory can be
explained by this.
It is important to understand that there can be several factors influencing the demand of the
product in the market. The increase in price of the product is one of the biggest noticeable flaws that
can be seen, however this can be explained by the following graph.

This graph shows the demand and supply graph of

the product presently, the price of the product is at
30$, creating a surplus because the supply is more
than demand. However, if the price is reduced to
match the equilibrium, then the issue of surplus will
be solved. Nonetheless, employing strategies to
influence the demand of the product could also be
used to shift demand to the new equilibrium at the
price of 30$; these could be as follows:

o Advertise the product in a new market

segment, thus targeting more people.
o Adding perks such as coupons or offers to
attract the existing target population.