Wii Sells Out Across Japan After a two-month TV-ad blitz for Wii in Japan, demand was expected to be much higher than supply.

Yodobashi Camera was selling Wii games on a firstcome, first-served basis. Eager customers showed up early and those who tried to join the line after 6 or 7 a.m. were turned away—many rushed off to the smaller stores that were holding raffles to decide who got a Wii.

Source: Gamespot News, December 1, 2006

a. Why was the quantity demanded of Wii expected to exceed the quantity supplied?

b. Did Nintendo produce the efficient quantity of Wii? Explain.

c. Can you think of reasons why Nintendo might want to underproduce and leave the market with fewer Wii than people want to buy?

d. What are the two methods of resource allocation described in the news clip? Is either method of allocating Wii efficient?

e. What do you think some of the people who managed to buy a Wii did with it?

f. Explain which is the fairer method of allocating the Wii: the market price or the two methods described in the news clip.