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__ You have just become the president of the school spirit committee.You find that there are over 100 students wanting to purchase a spirit shirt,but there are only 50 available, and the committee sells them for 20.00 each. School shirts may be purchased only through the spirit committee-no place else-and you can not reorder.. What is the best plan to handle this matter? (use economics terms to respond) Why? __

Question

__
You have just become the president of the school spirit committee.You find that there are over 100
students wanting to purchase a spirit shirt,but there are only 50 available, and the committee sells them
for 20.00 each. School shirts may be purchased only through the spirit committee-no place else-and
you can not reorder.. What is the best plan to handle this matter? (use economics terms to respond) Why?
__

__ You have just become the president of the school spirit committee.You find that there are over 100 students wanting to purchase a spirit shirt,but there are only 50 available, and the committee sells them for 20.00 each. School shirts may be purchased only through the spirit committee-no place else-and you can not reorder.. What is the best plan to handle this matter? (use economics terms to respond) Why? __

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HeathMaster · Tutor for 5 years

Answer

The best plan to handle this matter is to use an auction system to allocate the shirts to the students who value them the most, as evidenced by their willingness to pay a higher price. This approach aligns with the economic principles of 'supply and demand' and 'marginal utility', ensuring that the limited resources (spirit shirts) are distributed in a way that maximizes the satisfaction of the students and the revenue for the spirit committee.

Explain

In this scenario, we have a classic case of limited supply and excess demand. There are 100 students wanting to purchase a spirit shirt, but only 50 shirts are available. This situation can be addressed using the economic principle of 'supply and demand'. Since the supply is fixed and cannot be increased (no reordering possible), the best plan would involve allocating the shirts in a way that maximizes utility and possibly revenue for the spirit committee.One approach could be to raise the price of the shirts to balance the demand with the available supply. This would mean some students may choose not to buy at the higher price, and only those who value the shirts most (and are willing to pay more) will purchase them. This is known as 'equilibrium pricing'.Another approach could be to hold a lottery or a first-come, first-served sale, which would distribute the shirts randomly or to the quickest buyers. However, this might not reflect the true value students place on the shirts.A more equitable method might be to conduct an auction, allowing students to bid on the shirts. This way, the shirts go to those who value them the most, as indicated by their willingness to pay a higher price. This method could also potentially raise more funds for the spirit committee.Lastly, considering the principles of fairness and community, the committee could also consider a needs-based approach, prioritizing distribution to those who may not have had the opportunity to purchase a spirit shirt before or who contribute significantly to school spirit.
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