Article Response
Rebecca Howard
ECON201 Mr. Coon
In the Thursday, June 14, 2012 edition of The Wall Street Journal I found an article that pertains to the vocabulary Mr. Coon has been incorporating into class. The article describes the economic relationship between Spain’s fast fashion retailer, Zara, and its demanders.
Zara is a chain of fashion retailing owned by Inditex. Inditex reported an increase in profit for its first quarter due to the company’s rapid growth in emerging markets. This particular Zara location is in Madrid, Spain, also known as the fashion capital of the world.
The Zara chain provides clothing, accessories, and other miscellaneous products for both men and women. At the time this article was printed, it was mid-June, students are getting out of school and the season is changing. Zara being a fast-fashion retailer, it had the best products and variety for both genders, therefore, the demand increased and the sales did as well.
Zara will continue to grow rapidly, despite its competitors, because they sell quality clothing that meets the demands of all consumers.
Externality
The externality of this situation is that the clothing in Madrid is very expensive because it is high quality. So, the buying with a large sum of money is happy because they are able to purchase more. The buyer with less money is upset because they cannot afford the prices of the clothing.