Transcript S-Toys R Us

Supply and Demand
Graph Presentation
“Taking advantage of vacant mall space, Toys “R” Us is opening 600
temporary shops—or “pop-up stores”—this fall, a move that doubles
the number of its U.S. stores for the crucial holiday season.“
Source: The Wall Street Journal
09/09/2010
Toys “R” Us Regular Market
0S
Price
Equilibrium
Price
D
Equilibrium
Quantity
Quantity
Toys “R” Us Holiday Season
0S
Price
1S
Equilibrium
Price
D
Equilibrium
Quantity

“The toy retailer
is super-sizing a
bet it made last
year when it
opened 90
temporary mallbased Toys “R”
Us Express stores
during the
holidays… “ - The
Wall Street
Journal.
Quantity
As Toys “R” Us opens more shops, the supply of goods increases as well, causing a surplus. If all else
remains the same, in order to erase this surplus, the company has to decrease prices. Although the
Equilibrium price falls, both the quantity demanded and the Equilibrium Quantity increase.
Economic fact – Increase in Supply


- as the supply increases, there is no change in demand.
- the fall in price brings an increase in the quantity
demanded – a movement along the demand curve.