Question

The internet has changed how people shop for clothes, electronics, and other goods. Because of online shopping, many retailers have closed or shut down. How will this affect the local (brick and mortar) retail market for clothes

Answer 1

Answer: B) The supply of goods like clothes will decrease.

Explanation:

All else being equal, the local retail market for clothes will see a reduction in supply for clothes. This is simply as a result of less shops offering clothes than before because some have closed down as they couldn't keep up with online retail stores.

For example, the entire supply of Jeans for the town of Jeanophia were from 5 stores with each selling 5 jeans. 3 stores have closed down due to competition from jeanyjeans.com and now only 2 stores are open which has reduced the supply from 25 jeans to 10 jeans.