Principles of Microeconomics
Black Friday, the day after thanksgiving, is the biggest shopping day of the year by far. It is the beginning of the traditional Christmas shopping season. The term dates back to as far as 1966. Thought to of originated on the east coast by the year 2000 it was a term known throughout the United States. Black Friday is the most profitable day for many companies in the United States. Merchants and the media have used it instead to refer to the beginning of the period in which retailers go from being in the red (i.e., posting a loss on the books) to being in the black (i.e., turning a profit). A big portion of Total Revenue comes from the month of November. Almost everybody spends money on gifts during the Black Friday weekend. Some people stray away with it all together and some tactfully strategize their shopping game plan. Looking at the DealsPlus statistics, there is a 310% increase in the number of sales on Black Friday compared to the November average. On the day after Black Friday, there is a 240% increase, and by Cyber Monday the number of sales is still 210% higher than the November average. (Reference 1) In many cities people line up in front of stores such as Best Buy and Wal Mart hours before the stores open. Most stores open at 4 or 5am and customers line up to get the best deals. Some advertising has come under scrutiny as of late i.e. 42 inch Plasma TV for $499 with (two at this price) in small print. This could be called Price Discrimination but it’s more like false advertising. As with any sale, the ridiculously low priced door buster deals are used as a loss leader. This is an item the retailers intentionally takes a loss on, in the hopes of attracting more people into the store. With people in the store they will spend money on other items that aren't marked down. That's why there are usually only one or two items at the door buster price The Economic profits that come from Black Friday...
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