Would demand curve for more popular t-shirts be to the right

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Reference no: EM133352039

Assignment:

It is a Monday morning in August, two weeks before what will surely be a busy Labor Day weekend, and you have been hired as the new manager of a T-shirt store on Navy Pier. In addition to other responsibilities, you are in charge of all inventory, ordering and pricing decisions.

It has been a good summer. Pandemic restrictions were lifted just before the tourist season began and sales have been the best in years. As you look over the inventory you notice several situations that require your attention.

Many T-shirts are almost out of stock.
Most of those that are almost completely sold have only 2X and 3X sizes left.
Some prints are in nearly full stock and appear to have not sold well throughout the summer.
You can reorder any t-shirt prints in any sizes with a two-day delivery, but a 25% surcharge on every unit (shirt) ordered will be assessed.
The owner has asked that your priorities be maximum unit sales and minimum inventory after the holiday weekend.
The price you charge for t-shirts is 25% greater than your cost.
Currently, all t-shirts are sold at the same price

Answer the following questions using the microeconomic concepts and terms you have studied so far in this course.

1. Explain why the situation for the following items occurred:

Popular styles sold out in the most common sizes.
Popular styles in sizes 2X and 3X are not selling nearly as well.
You have a full inventory of styles that had minimal sales during the summer.

2. Propose a sales strategy for the remainder of the season for each of the situations in question 1.

3. If you reorder, which shirts would you want?

4. How would you price new shirts that arrive with a 25% surcharge? Remember, your standard price is cost plus 25%.

5. Comment on the demand curve for the more popular t-shirts.

Is the demand curve for more popular t-shirts the same as for less popular shirts?
If not, would the demand curve for more popular t-shirts be to the right or left of the demand curve for less popular shirts?
Could you price differently for more popular shirts versus less popular shirts? Why?

Reference no: EM133352039

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