Question

"Retailers in the United States make enormous added profits from Black Friday sales."

Do you agree with this statement? Why or why not? Think about how retailers lower their prices for Black Friday deals. How can they make added profits if they are receiving less money for each product they sell? What about retailers operating in markets that are purely competitive, or very close to it? Do they have the ability to make "enormous added profits?" Finally, suppose you are interested in a particular digital camera. You discover that it is on sale at Best Buy for $149 on Black Friday. You also discover it is on sale at Wal Mart for $149. What incentive, if any, can you think of for these companies to provide the same good for the same sale price?

Answer 1

I do agree but not completely with the statement as on the Black Friday country’s Christmas shopping season begins which increases the sales of the retailers in U.S.A and thereby profits but profits do not increase enormously. Because there is a competitive market retailer have to put competitive prices in order to sale more. By increasing the sales at lower price retailers can make lots of profits. The retailers have to sell at prices decided by the industry and not a sole firm. They can make good profits but not the enormous amount of profits because there is a presence of a large number of sellers in the market. Increasing sales is one of the incentives for big firms to put same prices of the product.