With the recent increase of overweight and obese Americans, a debate has surfaced over whether the government should tax sugary drinks. Taxing sugary drinks is the right step because it could change people’s choices behavior, it reduces the number of people who purchase these drinks, it could pay for health education and medical expenses, and it helps prevent obesity. Taxing sugary drinks could change people’s choices behavior. People need to change their life style and learn to live more healthily. Healthy choices are always more expensive than bad choices.
However, due to the higher prices, there is a certain segment to which these brands can appeal to – this strengthens the power of the buyers. Because of the high competition and many brands within the industry – there are low switching costs for the buyer. This is complemented by online shopping, which means that the retailers do not even need to be physically in the same place. This lowers the switching costs for the buyer and increases their power. The rise of the ethical social consumer and the information availability that came with the internet made the buyer demanding and less likely to develop loyalty towards a brand – this increases their power.
Price discrimination also shows signs of oligopolistic firm , as prices are set for different genders, age, time, season, due to lack of competition and choice. The firm is then able to charge a higher price to the group with more price inelastic demand and lower
A growth company tends to have very profitable reinvestment opportunities for its own retained earnings. Economic growth will affect Etisalat as it would increase their profits due to more people wanting more products and wanting to spend their money. As people have more money to spend on luxuries instead of the essentials it means that the higher value products will be brought. For example the Andrex toilet rolls will be brought instead of Etisalat value, because of this it means more money is being spent in the store which is an advantage for Etisalat. Recession occurs when people involved in business become more cautious and: * Customers cut back on spending, and start to save more * Manufactures and sellers cut back on their orders, produce fewer goods and start to cut back costs in general, including by laying off workers.
Expected future prices can also affect the demand curve. If it is suspected that Tylenol will be more expensive next month, it would cause in shift that increases the demand of Tylenol. Since people are rational, they know that buying more now will save them money later. The supply side of the market also has various factors which cause a change in supply. The prices of inputs is an imperative example.
Department stores were able to flourish due to industrial advancements at the time like new factory machines which made mass production faster and more efficient also the railway which allowed raw products and finished goods to be transported much faster and cheaper than the previously used canals which were very slow. Department stores were not selling high quality luxury items but were able to promote an image of luxury. Hetherington, K. (2009) wrote that “The department store was not really a place designed for selling many genuine, high priced luxury items; rather, it was geared up to selling high volumes of cheaper goods and making a profit out of the economies of scale that came with selling lots of things at a small profit rather than a few things for a large profit.” In recent years department stores have become outdated as new shopping malls and retail parks have become the dominant figure in consumerism. Retail parks contain many big named stores and normally have very large car parks as the consumers they intend on attracting are families and people who drive to the retail park on
The growing economy makes the cost of living more expensive, the overpriced houses are closer together, so you have very little yard to keep up with. The larger city also has faster internet and cable television. There are many disadvantages to living in the big city neighborhood. The economy has inflated property values and taxes, adding the cost of living. The crime rate is very high, putting you and your family at greater risk of being the victim of a crime or violence.
By doing this firms can lower prices and sell more product or maintain higher profit margins- all good for the bottom line. In the fashion markets today, fashion trends are constantly changing fast. Poor trend forecasting or slowing of unsold inventories will cause product to be marked down or written off, which create cost-cutting measures to be implemented. The downside to the conventional wisdom method is in order to have the lowest cost, contracted firms may ignore environmental concerns, employ child labor, withhold on safety and engage in other ghastly practices. 2.
Similarly, the transaction cost for stores such as H&M is more than that of the jewelry shops but less than the department stores. Also, it is much harder for a business enterprise to internalize if it has high transaction cost. Thus, jewelry shops can internalize at an easier way as they have comparatively lower transaction costs. Since, jewelry shops can internalize in an easier way, theoretically, they should make more money. And it is only fair that the shop that makes more money has to pay more rent.
This means that as there is a substantial amount of excess supply prices should be cut heavily in order to increase the demand for this stock. If Monsoon ignore how much excess supply there is when deciding at what extent to cut prices they wouldn’t know how much supply there is to actually sell and therefore may try and sell it at too high a price, therefore causing demand to rise slower than it potentially could, should they discount the prices further Secondly, it is important to consider how quickly stock will go out of fashion. If some of the surplus clothing stays in fashion after the seasonal period, consumers are more likely to buy it at a higher price. This could affect the extent as to how much Monsoon cut prices because if the clothing goes out of fashion they will have to cut prices further, in order to sell the excess supply; getting rid of stock. It is important to consider how expensive the clothing was to buy in, in order to try and maximise