PROBLEM: TWO CANDLE STORES IN A RICHMOND MALL.
PROBLEM: TWO CANDLE STORES IN A RICHMOND MALL. Kids, in economics, it’s helpful to start with a problem, as Paul Krugman did. Here is an economic problem that Annalisa raised. There are two stores that sell candles close together in a shopping mall in Richmond. Annalisa expressed surprise that there was enough demand for candles to support even one store, but then wondered why they would choose to locate so close together. We are accustomed to thinking of retailers as choosing a location where there are few competitors, where there is an untapped market. Why are the two candle stores near each other? I’ll make some suggestions in a couple days.