What action would the store owner most likely take to …

Business Questions
Short Answer
Step by Step Solution
Business Questions

A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take? The store owner would most likely raise the price of the spring jeans to encourage producers. The store owner would most likely lower the price of the spring jeans to encourage producers. The store owner would most likely raise the price of the spring jeans to encourage consumers. The store owner would most likely lower the price of the spring jeans to encourage consumers

Short Answer

The answer discusses the concept of supply, highlighting its positive correlation with price and the Law of Supply, which states that higher prices lead to increased supply. It also offers practical implications for store owners, suggesting strategies like adjusting prices and monitoring consumer behavior to stimulate demand when sales decrease.

Step-by-Step Solution

Step 1: Understanding Supply

Supply refers to the amount of goods that sellers are willing to offer for sale at a specific price over a certain period. It is influenced by various factors and typically shows a positive correlation with pricing. As the price of a commodity increases, sellers are generally more motivated to supply more of it. Key points include:

  • Definition: Quantity of goods available for sale.
  • Timeframe: Relevant for a specific period.
  • Price Relationship: Higher prices often lead to increased supply.

Step 2: The Law of Supply

The Law of Supply states that there is a direct relationship between the price of a good and the quantity supplied. Essentially, as prices rise, producers are willing to supply more of that good to the market. Conversely, if prices fall, the quantity supplied typically decreases. This principle is crucial in understanding market behavior. Key aspects to consider include:

  • Positive correlation: Supply rises with price.
  • Market dynamics: Changes in price affect supply levels.
  • Implications for consumers: Price adjustments can affect availability.

Step 3: Practical Implications for Store Owners

If a store owner notices a decrease in the demand for a product, such as spring jeans, they may take specific actions to boost sales. One likely strategy is to lower the price to attract more consumers and stimulate demand. This not only balances supply with current market demand but also encourages more customers to make a purchase. Consider the following options for store owners:

  • Adjusting prices: Lowering to encourage sales.
  • Monitoring consumer behavior: Analyzing trends for better inventory decisions.
  • Setting promotional offers: Temporary price reductions to boost sales volume.

Related Concepts

Supply

The amount of goods sellers are willing to offer for sale at a specific price over time

Law Of Supply

A principle stating that higher prices lead to an increase in quantity supplied, while lower prices result in a decrease

Practical Implications

Strategies store owners can use, such as adjusting prices or monitoring consumer behavior, to align supply with demand.

Table Of Contents
  1. A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take? The store owner would most likely raise the price of the spring jeans to encourage producers. The store owner would most likely lower the price of the spring jeans to encourage producers. The store owner would most likely raise the price of the spring jeans to encourage consumers. The store owner would most likely lower the price of the spring jeans to encourage consumers

Related Articles

Scroll to Top