Question

During online festival sales, the prices of many products are very low. Use the concept of demand and supply to explain why the sellers sell at such a low price. What happens to the equilibrium when the price is lowered? Does this benefit only consumers or sellers as well? Explain.

Answer 1

• During online festival sales, sellers offer products at low prices to increase demand and attract more customers. They may also have excess stock or lower costs due to large-scale sales.
• When the price is lowered, quantity demanded increases, while quantity supplied may decrease. A new equilibrium is reached at a lower price and a higher quantity demanded.
• This benefits both consumers and sellers. Consumers get products at lower prices, while sellers benefit from higher sales volume, faster stock clearance, and increased customers.