Dunham, Kemba J. “Sweep of History Helps Propel a Boom In Keepsake Brooms.” The Wall Street Journal. Friday, October 15, 1999.
A recent article in The Wall Street Journal described the recent boom in sales of keepsake brooms. This is an example of principle #2, “the cost of something is what you give up to get it.” It is tradition for African-American couples to purchase a broom for their wedding because it signifies a link to their past. Slave couples were not permitted to marry, so to signify their union, they would hold hands and jump over a broom, known as, “jumping the broom” (Dunham, p.A1). The keepsake brooms are selling for a very high price, up to $175 dollars for a single broom. However, the $175 dollars is a very small price to pay for a keepsake that will have much more meaning than a certain dollar amount. If couples did not decide to buy the broom because they thought that it was too expensive, they would lose out on something that they could never replace. They could buy a broom after their wedding, but it would not have nearly as much meaning to them. The benefit of having a broom that signifies something as important as marriage only has the initial cost of anywhere between $30-$175 dollars. The opportunity cost for purchasing one of these brooms for the majority of couples is very low because a couple only has to give up $175 dollars for something that they will have the rest of their lives and could pass on to their own children.
Another example of principle #2 that can be associated with this article is that one of the producers of these brooms employs teenagers instead of adults. Since the producer employs teenagers, the firms input costs will be lower so the supply curve for keepsake brooms will shift to the right. The price of brooms would decrease and the quantity produced would increase. The producer is thinking that if they have to employ people to help make the brooms, why not employ teenagers who can work for the minimum wage? The firm would rather not have to pay anyone to make the brooms, but since they must, they increase their productivity by having teenagers work for them. The producers give up having an experienced adult who demands a higher wage, for a teenager who needs to be trained but is willing to work for a much lower wage. Adults with past experience of making brooms would demand more than minimum wage because of the skills that they possess.
The recent boom in sales of keepsake brooms is because more couples want to participate in ritual that link them with their ancestors. This represents a shift in tastes. The brooms first became popular in 1976 when the miniseries “Roots” was on television (Dunham, p.A1). However, within the last two years there has been a greater demand for these brooms. The greater demand would shift the demand curve for keepsake brooms to the right, increasing the quantity demanded of brooms and increasing their price.
This boom in the sale of keepsake brooms is an example of a large amount of consumer surplus. As one of the producers of the brooms mentioned, “They can’t believe my brooms are so cheap” (Dunham, p.A6). This producer also said that he gets more money in the mail for his broom then what the broom actually costs. Currently, the producers are willing to sell the product for what they are selling it at right now, but the consumers are willing to pay more for the product then they currently have to.
Presently, the brooms represent a product that is inelastic. People are willing to pay a very high price for these brooms because they are keepsakes that they will have for the remainder of their lives. In the past, it seems as though the brooms were more of an elastic good because people may have thought that it would be a nice touch of tradition to have at a wedding, but $175 is expensive for a broom. Instead, the people may have put their money into helping to finance the wedding. This is an example of a trade-off. People have the choice of not buying the broom and saving the $175 dollars for something else, or they have the choice of purchasing the broom and not having the extra money to put towards the wedding.
This article encompasses two of the ten principles of Economics: tradeoffs and the cost of something is what you give up to get it.