By: Izzy DeAngelis
Christmas time is all the buzz in late November and December. Everyone’s looking for the “perfect” gift and those great deals. So with good deals comes some opportunity costs, especially on a hectic day like Black Friday. The day after Thanksgiving, also known as Black Friday, is when most people go out to shop for their gifts. According to the National Retail Federation, there are about 164 million people that go shopping during Thanksgiving weekend. The craziest thing about this day is people waking up at the crack of dawn to go sprint into the stores and get the limited offers. In this process, they may still not get the goods they seek to get, which would not only be an opportunity cost just like having to wake up early, or potentially getting hurt in the process by being trampled by crazy ladies.
Since this is the one of the most busiest shopping days of the year, the U.S. made on average last year about $655.8 billion(Amadeo). This increase over the years has shown substantial growth for the sales in retail stores like Kohl's, JCPenney’s, Boston Store, etc. With the increased traffic of people going in and out of the stores, there is usually an increase in employment options for these stores. These job opportunities open up which help create marginal benefits to people in need of a job/money. But as with anything there are always marginal costs. In this case, by having a new job the employees won’t have as much time to do other things besides work because of the increase of sales. In the end, the good outweighs the bad and the employers will not only be helping themselves but others too, especially when their customers find that perfect gift.
Not only do stores experience an increase in employment but they also increase the demand of their goods. According to the law of demand, with the increase in demand of certain products in these stores there will be a decrease in prices, which is why there are sales that happen during the holidays. Since there will be an increase in demand, the supply curve will also have to shift as well. With the decrease in a lot of the product’s prices, the supplier won’t want to produce as much therefore showing a decrease in production. This is why there are only a certain number of products available for purchase in stores, on Black Friday.
Overall, companies like Kohl’s and Best Buy, usually have large sales around the holidays because their products are more elastic than companies of higher name value, like Gucci. Those companies are inelastic because they are known for their high prices and uniqueness, so those companies know that during the holidays people will spend an absurd amount of money on the ones closest to them. This is why Christmas is the most wonderful time of the year.
Amadeo, Kimberly. “How Much Do Americans Spend on Black Friday?” The Balance. n.p. 11 Nov. 2017. 13 Nov. 2017.
firstname.lastname@example.org. “Holiday Headquarters.” National Retail Federation, 6 Oct. 2014. 13 Nov. 2017.
Quora. “What Are The Economics Behind The Black Friday Sales?” Forbes, Forbes Magazine, 27 Nov. 2013. 13 Nov. 2017.