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Scenario 15-1 One of the Nation's Most Popular Times for Sales Promotions

question 50

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Scenario 15-1
One of the nation's most popular times for sales promotions was a great deal longer than usual in 2010. Black Friday, which typically takes place the Friday following Thanksgiving, started in October for a number of retailers and was also scheduled to occur throughout the month of November. Sears and Walmart, who had been experiencing a continuous decline in sales recently, were the biggest names behind the move. Executives from a number of companies began to realize that consumers respond to the word "sale" regardless of the time of year, so they decided to simply stretch the period of time in which their biggest sales ran. Companies designed new sales flyers and circulars, and began to promote the various sales on their websites. Other companies such as Targetwere also implementing a similar strategy; by emphasizing savings earlier in the season and for a longer period of time, company executives hoped their brand would be the first, second, and last choice for consumers during the holiday season. (Stephanie Clifford, "Stores Push Black Friday Into October." The New York Times, October 28, 2010.)
-(Scenario 15-1) During the holiday season,Snuggles,a winter clothing retail store,offers its employees $10 for every additional sweater that they sell.This is an example of:

Understand the significance of elasticity in determining the effect of taxes on price and quantity in the market.

Comprehend the role of tax and subsidy interventions in competitive markets and their outcomes.

Realize the social and economic implications of sales and excise taxes, including their regressive nature.

Understand how the tax-transfer system affects income distribution.

Definitions:

Machine Hours

A measure of production output or usage expressed in terms of the total hours that machines are operated within a specified period.

Fixed Proportion

A production scenario where inputs must be used in specific, unchangeable ratios to produce output, often resulting in a limitation on the flexibility of the production process.

Isoquant Map

A graphical representation showing different combinations of inputs that produce the same level of output.

Curves

In various contexts, it refers to graphical representations that show a relationship between two or more variables or factors.