South-Western College Publishing - Economics  
Long Fingernails and Jammed Printers are the Mothers of Invention
Subject Avery comes up with an innovative design for making labels.
Topic Profit Maximization and the Firm; Monopolistic Competition
Key Words

innovation, competition, price, efficiency

News Story

In an attempt to make office mailing systems more efficient, Avery has come up with the "Quick Peel" Automatic Label Peeler - a device that not only prints out labels, but peels them off for you as well.

Avery learned that to save time in producing mailings, people tended to print out the labels and then peel off several at a time before placing them on the envelopes. This process was not without drawbacks, however, as labels got dirty or stuck together in the process. The Label Peeler is designed to eliminate these problems. Priced at $200-300 each, Label Peelers are designed to reduce the time it takes to produce a 500-piece mailing from 54 minutes to 30 minutes by making the labels easier to place onto envelopes. Members of the International Association of Administrative Professionals were impressed with the innovation when given an advance look at the device.

(Updated September, 2004)


Is this a complement to the office laser printer or a substitute for it? Why?

2. What should happen to the demand curve for similar products in this market? Why?
3. In the market for office label makers, what would you expect to happen to the market price? Why? Use a graph of supply and demand to demonstrate your answer.
Source Gwendolyn Bounds. "Sticky Fingers? How Avery Found an Office Problem to Solve." The Wall Street Journal. 13 July 2004,

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