Essay on The And Demand Of Jos

1006 Words Oct 1st, 2015 5 Pages
We are all familiar with the outrageous discounts that Jos. A. Bank offers to its consumers through its television commercials. “Buy one get three free!” or “Buy one get five free!” are familiar expressions to us when we hear the company Jos. A. Bank. However, the company has already started to decrease the amount and levels of discounts that it is now offering to customers and is now starting to experience the side effects of doing this. During the second quarter of 2015, sales dropped 9.4% (“Jos. A Bank”). Now let’s take a look at why this is happening. The answer to why the company experienced a drop in sales can be analyzed through a supply and demand model. A graph modeling the supply and demand of Jos. A. Bank’s products has been produced to explain why this is happening. If we say that the average price of a suit at Jos. A. Bank was $500 after the discounts applied, this price represents the equilibrium price in the market (represented by point EP in the graph on page three). At $500, let’s say that the quantity demanded and the quantity supplied is five million suits. Let’s say that the average price of a suit went up to $750 after the discounts were reduced. The amount of suits available for purchase (quantity supplied) is going to increase (represented by point Qs) because the manufacturers of the suits have more opportunities for profit from the price change but the amount of suits demanded will be greatly reduced (represented by point Qd). In the graph two and a…

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