S-Sherry A-Ann

The young man called Jason is the novice manager of the clothes company (selling inferior goods). Although he has just graduated from university and has nearly little practical experience, he is very passionate about his first practical market trial.

I'll increase the revenue of our company and increase our local economy!!!

Total Revenue: The amount paid by buyers and received by sellers of a good.

Inferior Good: A good whose quantity demanded decreases when consumer income rises.

S

Recently, a large number of immigrants move to this countryside as the beautiful view and environment here. They are looking forward to their new life in this lovely place.

I'm so excited about my new school now!!!

Me, too!!!

Where is our new house, dad?

Right there! That biggest one!

S

Jason is very happy as soon as he hears the news. Seeing this growing demand that will strongly help the quantity, he intends to set a price-off in order to both further increase the total revenue and make consumers more enjoyable. He then lets staffs start advertising the promotion, making plans and do all preparation works.

S

Yes, sir!

Yes, sir!

Alex, you gather all the good that we gonna sell on the event. And Stephen, you're responsible for advertising. Make sure let all the people know our event.

S

During the promotion days, both stores in the building are full of people. More than half of the residents in the countryside purchase in this promotion.

S

What did you buy, Jennifer?

I bought this black handbag, the lovely pink dress, and the blue shirt is for you, David!

Wow, they are all look so great! Thank you, honey!

The same to Jennifer, she is so happy that she got abundant stuffs from the promotion. The week after next week is her daughter Alice's birthday, she is going to buy Alice's favorite dress next week.

S

Jason is very happy after the promotion, not only just as the increasing revenue, but also they beat the shoes store in this round. As what he expected, the increasing residents further help the quantity and total revenue. On the elastic demand graph, he finds that the price always moves smaller than the quantity. So when the price goes down, the total revenue will always goes up. He then expected that if he decrease price more, he'll get more quantity sold. After that, he plans to make another price-off based current price in the promotion.

It seems that maybe we need another promotion.

S

In this promotion, the price decreases from $50 to $4o.The quantity increases from 800 to 1000. The total revenue increases from $35,000 to $40,000.

S

Before the promotion is going to be ended, Jason lets his staffs prepare for another one again, but the price is going to be lower. It is because he finds that a promotion can not only create higher benefit, but also benefit consumers buying products at lower prices. Although staffs are questioned about his decision, Jason trusts that the theory is always right.

Sir, are you sure that we are gonna hold another promotion again with lower prices?

Definitely. We'll earn more in the next coming one.

S

In the second promotion, there are more people coming than last time. As the huge growing buyers, a large amount of clothes are sold out and many people do not get their clothes.

S