Monopolists creating buying frenzies to maximize profits and consumer surplus.
The article discusses why companies may purposely create shortages of new products to increase demand and profits. This is because consumers are unsure about how much they are willing to pay for the product, leading to active trading in the second-hand market. By limiting initial sales, companies can raise prices later on and capture more profit. This strategy is based on the idea that consumers consider the resale value of the product when deciding how much to pay. Creating a buying frenzy can help the company maximize profits by balancing current sales with future prices.