Supply and Demand

Supply and Demand
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  • MODESTO
  • MALIBU
  • These jeans fit perfectly! And the price is amazing!
  • In a big city where fashion is a major drive and the demand for high waisted jeans continually increases, two businesses have set out to fulfill the desires of every teenager. 
  • $79.99
  • They have the same jeans as Modesto on display! And they're cheaper! I'll take three please. 
  • MALIBU
  • Modesto and Malibu are foreign fashion stores unfortunately located within very close proximity of each other and offering merchandise at relatively similar prices. 
  • Hello? Yes this is Leonard Modesto. Please inform the business manager that I have decided to lower the jean price to $69.99.
  • A main component that drives business in both locations are high waisted jeans. Modesto and Malibu equally selling them at a price of $79.99. As they adapt to the prices of clothing in the new country, they have faced shifts with supply and demand. 
  • We're losing customers again thanks to the competition! This isn't good. 
  • MODESTO
  • When Modesto raised jean prices to $100 as a cause of high demand, they lost customers to Malibu who still sold them at a price of $79.99. 
  • An increase in price from both businesses caused a loss of customers from both parts. Modesto, having obtained a surplus for a while now, decided to decrease the price in order to sale and placed jeans at a price of $69.99.
  • As customer flow began to arrive at Modesto, Malibu lowered jean prices to $59.99 and took customers away from the neighboring business.
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