Something Wall-Mart This Way Comes

Media Type: TV Clips Topic: Supply & Demand, Incentives, Pricing, Elasticity, The Firm

South Park

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Something Wall-Mart This Way Comes spoofs Wal-Mart for the closures it creates among small local businesses and the changes in consumer shopping behavior. The reason for both of these changes is the price elasticity of demand. Wal-Mart's lower prices drive consumers to its stores. If price didn't matter, smaller local shops with somewhat higher prices but more knowledgeable staff would be able to compete. But since price does matter, a new Wal-Mart is a big threat to existing stores.

(Clip suggestion provided by: Michael Jetter, Ph.D, Department of Economics, Universidad EAFIT)

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