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Business Economics Gm 545 Project Part 1 Fall Session a 2011

In: Business and Management

Submitted By Sorie
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Pages 4
Recently consumers are increasingly demanding the UK clothing firm Primark to produce goods in an ethical manner, turning the spotlight on workers wages and working conditions. Primark currently has more than 170 stores and made a £200m profit last year on total sales of more than £1.6bn. The leading European and US retailers have come under growing pressure to ensure that workers in their supply chain - particularly in labor-intensive markets such as India and China - are not exploited. The BBC's Panorama programme, which carried out a six-month investigation, alerted Primark to the problems that their suppliers are sub-contracted smaller firms, which were using child labor to carry out embroidery and sequin work. Under the terms of its code of practice for suppliers, Primark prohibits the use of child labor in its manufacturing chain.
Equilibrium Price: This is the price at the quantity of goods demanded is equal to the amount supplied. Let us take an example, say when the price of a tin of sugar is $1 there was a demand of 100 boxes of sugar and 100 boxes were supplied to the market at that particular time. Then we say that $1 is the equilibrium price at that point.
Considering consumers as stakeholders, the intense pressure cause the demand of the Primark’s products to decrease. A decrease in the demand of their product leads to excess supply of their products. Since supply is excess, equilibrium price will fall.
A case may also arise where there will be a change in both supply and demand of their commodity. This may occur in the ways that both demand and supply may increase or both supply and demand may decrease, supply may increase while demand decreases and lastly, supply may decrease while demand increases.
If both supply and demand decrease equally, it is assumed that no change had occurred and there will be no change in the price. Vice versa

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