Comment Re:I loathe this invitation 'nonsense' (Score 1) 62
"Economist: To limit supply and create more demand for the product"
This might be why a marketing guy would do it but an economist would probably disagree.
A firm should not be able to affect demand by limiting supply. At best they can affect the price and quantity demanded, and that's only if it's a monopoly good.
Demand is a function of consumer choice. If you imagine the econ 101 supply-demand picture it's the convex, downward sloping curve.
If a single manufacturer of a commodity good reduces supply the marginal increase in price should incentivize other manufacturers to supply more. Now a monopoly supplier can reduce supply to maximize their profits but that's only because they move the price-supply point farther to the left (up) of the demand curve.
Caveat: This is the basic supply-demand model. It does not take into account things like luxury goods (which have demand curves with upward sloping portions) or more advanced models that start throwing in all kinds of other factors and interactions.