GED Practice Question Answer…Economics
Businesses run special sales on Black Friday to bring in more people. (Ever gone to one? They’re crazy!! Like, Mervyn’s opened at 4:00 a.m.!!)
According to the theory of supply and demand (see my last post), the businesses:
1) Will want to sell less of the special sale promotions.
2) Will want to sell more of the special sale promotions.
3) Will want to sell a normal amount of the special sale promotions.
4) Are not allowed to reduce the prices below a certain point.
5) None of the above.
So, what did you answer? Here’s the fact… supply and demand says that businesses will want to sell LESS of the special sales promotions, because at a lower price, businesses don’t want to sell as many items. That’s answer 1. They want to sell MORE of the more expensive items, or at least things with more profit. So, what are the businesses doing?
Well, you notice they have a limited amount of those cheap items, right? And a limit on how many you can buy, too. That’s cuz they don’t want to sell a whole truckload of those! They want to get a bunch of people coming into their stores looking for the sale items. (Because according to supply and demand, more people will want to buy the cheaper items, right?) Then, the stores want to sell other items to the people who come in… get you to do as much of your Christmas shopping there as possible. Can you see how it works? That’s economics in action!
