What Do People Want to Wear?

EDUCATOR'S VERSION

This lesson printed from:
http://www.econedlink.org/e458

Posted July 22, 2003

Standard: 7

Grades: 6-8, 9-12

Author: Mike Duckworth

Posted: July 22, 2003

Updated: January 8, 2008

DESCRIPTION

To stay in business, fashion merchandisers must be able to anticipate what consumers want. By looking at different retail websites, students will look to anticipate what consumers are demanding. Students will then go through the market scenarios for each product and try to anticipate the effect the scenario will have on the demand and price (assuming constant supply) for the product they have chosen.

KEY CONCEPTS

Demand, Equilibrium Price, Price, Quantity Demanded, Quantity Supplied, Supply

STUDENTS WILL

  • Analyze market scenarios to determine their effect on the demand and price for the identified product.
  • Determine the relationship between a change in demand and a change in price.

INTRODUCTION

clothing rack Purchasing agents work to identify market trends for retailers, trying to predict items that consumers will demand. In this lesson, the students take on the role of purchasing agents; as purchasing agents they try to anticipate the impact of certain market scenarios on the demand and price for clothing items they have selected. The lesson builds upon students' prior knowledge of determinants of demand and how they impact changes in that demand. The impact of interest is the effect on price. Make sure to tell students that market prices are set by the interaction of demand and supply (be aware that they should be more concerned with the marketing merchandise with short product life to a discriminating public). By trying to determine what is "hot" and what is "not", students will be learning about determinants of demand and ultimately, price.

The determinants of demand for this lesson include: tastes and preferences, income (normal and inferior goods), price of related items, goods and compliments, future expectations, and number of consumers in the market.

PROCESS

How do different market scenarios affect the demand and price for clothes? The students have a list of items to sell. The list includes these items: dress pants, winter coats, ski sweaters, and athletic shorts. The students will need to select examples of these products online.


Potential web sites include but are not limited to the following:



Remember, they want to enter a market in which there will be an increasing demand for the given product. Students should discover that changing the price point on a demand curve changes sales. This is a supply shift.

Student will go to different web sites and identify different types of clothing listed above: dress pants, winter coats, ski sweaters and athletic shorts. Then they need to complete both interactive activities and print their responses. The responses can be used to assess the students' learning. The students should use what they find on the Web site(s) to create the "market scenarios" that are described in the extension activity.

Again, the determinants of demand for this lesson include: tastes and preferences, income (normal and inferior goods), price of related items, goods and compliments, future expectations, and number of consumers in the market.

For the questions below, write what effect the above scenario has on the product and explain why.

  1. Winter Coat: Unsually mild winter? [An unusually mild winter would decrease demand and price for winter coats.]
     
  2. Winter Coat: Winter begins? [Winter beginning would increase the demand and price for winter coats.]
     
  3. Winter Coat: Relocate to Southern California? [Relocating to southern California would decrease the demand and price for winter coats.]
     
  4. Winter Coat: Rock stars make it trendy to wear winter coats? [Rock stars making it trendy to wear winter coats would increase the demand and price of them.]
     
  5. Ski sweater: Skiing becomes more popular? [Skiing becoming more popular would increase the demand and price for ski sweaters.]
     
  6. Ski sweater: Ski sweaters help increase weight loss? [Ski sweaters helping increase weight loss would increase the demand and price for them.]
     
  7. Ski sweater: Unusually mild winter? [An unusually mild winter would decrease the demand and price for a ski sweater.]
     
  8. Ski sweater: Celebrity endorsements? [Celebrity endorsements on ski sweaters would increase the demand and price for them.]
     

For the questions below, write what effect the above scenario has on the product and explain why.

 

  1. Athletic Shorts: Famous people wear athletic shorts in public? [Famous people wearing athletic shorts in public would increase the demand and price for them.]
     
  2. Athletic Shorts: Schools ban the wearing of athletic shorts? [Schools banning the wearing of athletic shorts would decrease the demand and price for them.]
     
  3. Athletic Shorts: Working out becomes trendy? [Working out becoming trendy would increase the demand and price for athletic shorts.]
     
  4. Athletic Shorts: Unusually cool summer months? [An unusually cool summer would decrease the demand and price for athletic shorts.]
     
  5. Dress Slacks: The move to a more casual workplace? [The move to a more casual workplace would decrease the demand and price of dress slacks.]
     
  6. Dress Slacks: Increase in per capita income? [The increase in per capita income would increase the demand and price of dress slacks.]
     
  7. Dress Slacks: Warmer weather? [Warmer weather would decrease the demand and price for dress slacks.]
     
  8. Dress Slacks: Increase in employment in the professional sector? [An increase in employment in the professional sector would increase the demand and price for dress slacks.]

Make sure to discuss the correct answers to the questions with the class after they have finished the activities.

CONCLUSION

Based on the information gathered in the market selected for online research, list the demand determinants that would currently affect it. Students should be prepared to answer these questions in a class discussion about demand and price.coat

  • What happens to price when demand increases?
  • What happens to price when demand decreases?
  • What type of relationship do you see between demand and price?

During this discussion, the students should recognize the direct relationship between price and quantity demanded when supply is constant. As demand increases, so does price. As demand decreases, so does price.

ASSESSMENT ACTIVITY

The printed answers to the market scenarios provide immediate assessment.

Also, have the students answer these questions as they relate to the issues learned in the lesson.

1. Why do businesses advertise their products? [To increase the number of consumers in order to increase demand, or to increase people's taste for that good in order to increase demand.]
2. Why might you advise a business to have a sale? [A sale lowers the price. Price is not a determinant, but would change the quantity demanded.]
3. How do seasonal expectations influence demand and price? [Warm clothes demanded in cold times of the year; lighter clothes demanded in warmer times.]
4. In your work purchasing products, how might you be influenced by what you have learned? [Answers will vary.]

EXTENSION ACTIVITY

1. Have the students create their own market scenarios. Have them use their scenarios to quiz others in the class about the relationships they have been studying. If these markets are defined by listed internet sites, teachers can invite explanations of price differences among brands of specific products. Encourage discussion of price similarities and reasons why tastes for some (such as running shoes) allow manufacturers of those products to extract premium prices. These web sites offer sufficiently broad examples of seasonal sales tactics by line of production.

2. For a quick evaluation activity, have each student use a note card with an arrow on it. After the students hear a report on a market scenario, they are to hold their cards so that the arrows point up or down, showing the predicted change in demand. This provides a basis for immediate feedback and discussion.

3. Encourage students to look at newspapers and find headlines that signal changes in demand. Teachers could provide news headline links or let the students search on their own. Housing, commodities, entertainment, and other markets also lend themselves to be analyzed in terms of changes in demand.