Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Peloton's Predicament: WhatToDo When Demand Outstrips Supply ByJon Picoult,Forbes Contributor (January 25, 2021) Many Peloton customers are exhausted - not by their workouts on the

Peloton's Predicament: WhatToDo When Demand Outstrips Supply

ByJon Picoult,Forbes Contributor (January 25, 2021)

Many Peloton customers are exhausted - not by their workouts on the company's exercise bikes, but by the seemingly endless wait for the fitness equipment they've purchased.

Peloton's pricey bikes and treadmills have been in high demand since the pandemic closed down gyms and fitness centers, leaving consumers to look for home-based exercise alternatives.

With Covid-19 lockdowns substantially increasing demand for its products, Peloton has struggled to keep up with orders.

According to The New York Times, Peloton customers are being given delivery timeframes up to ten weeks out from their purchase dates. And, as delivery day approaches (or even arrives), some customers get messages from Peloton indicating that their equipment won't arrive when promised.

Peloton's predicament might seem a lot more appealing than the converse problem - having a lot of product supply but no customer demand. In truth, however, an inability to reliably deliver on customer orders creates serious reputational risk for a business. It's a risk with which Peloton has become all too familiar, as customers take to social media to express their dissatisfaction and, in some cases, even cancel their orders and defect to competitors.

(Source: https://www.forbes.com/sites/jonpicoult/2021/01/25/pelotons-predicament--what-to-do-when-demand-outstrips-supply/?sh=5402746662d1)

The article states that there is an increased demand for exercise bikes because of Covid-19. Identify what nonprice determinant of demand this is and explain the effect this has on the demand curve for bikes, and on their market price and quantity. (3marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Research In Forest Economics And Forest Policy

Authors: Marion Clawson

1st Edition

1317362624, 9781317362623

More Books

Students also viewed these Economics questions

Question

Describe the three major subdivisions of the Malleus Maleficarum.

Answered: 1 week ago

Question

Explain the causes of indiscipline.

Answered: 1 week ago

Question

Explain the factors influencing wage and salary administration.

Answered: 1 week ago