Scarcity is the economic problem often experienced by many companies in the world. It is the art of having too many and unlimited wants in a world where there are limited resources to satisfy those wants. The economic problem makes a society deficient of productive resources to fully satisfy the human wants. Wal-Mart as an organization has devised methods to try curbing the problem of scarcity in the society (Ferrell, John, and Linda). Walmart spends approximately $7.6 billion in a year to buy back shares of its own stock. Just as scarcity in the art of having too many wants, Walmart buys the shares back and leaves only a few shares for the other owners to buy. The organization does this to limit the number of shareholders in the organization and hence reducing people’s wants. Increasing the price of the goods and shares increases the cost of acquiring the goods hence limiting access to very few individuals with the required cash to access the products. By doing this, Walmart reduces the problem of scarcity in the society.
Capitalism is an economic system which is based on private ownership of production and operation of the acquired profits. Walmart in the past has been scolded for having a typical example of everything negative about capitalism. In the recent past however there has been a change in thoughts on the views of how Walmart uses the ideas of capitalism to benefit the society. Walmart has embraced green products and technologies since 2007 (La, Porta, and Andrei, pp 145). Being the first company to push for the alternative technologies such as fluorescent bulbs it has depicted a great step in positively incorporating capitalism into the economy. Their impact on the environment has put them in a spotlight where they have transformed from being the greedy capitalists who mainly spent most of their time exploiting the society to enlightened capitalists who strive to enhance the welfare of the society. This is evident from their efforts to make sure that their society embraces a green environment.
Walmart as a company has been accused of many things among which are; loss of jobs for people, low wages below the expected level, hazardous health risks, overwhelming tax burdens to taxpayers, environmental degradation among others. However, even though some of these claims are true, the truth is that if Walmart is eliminated from the American Economy, then there are going to be many consequences for the and setbacks in the economy. There are workers who lost their jobs when Walmart came to town. This is because they worked for the smaller companies which succumbed to competitions from Walmart. However, Walmart has created many job opportunities than it has contributed to loss of jobs. It is true that Walmart Company is a burden to the taxpayers. It receives grants and the taxes it pays out are more than the profits they make in a year. This feature makes Walmart a great burden to the taxpayers. Walmart management has in the past ignored the need for a good environmental management procedure and as a result the company has degraded the communities’ environmental conditions. However lately, that notion changed when they decided to start embracing a good environmental procedure to curb pollution threats (Kipple, Adam, and Luke, pp56).
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Demand and supply equilibrium states that whenever the prices of a commodity are low, its triggers a great demand in the society prompting too many sales. The reverse is, therefore, true such that when the prices are high, the demand for the commodity reduces. This, therefore, means that for Walmart, when they lower their prices in the market, they target a grand sale where many people come forth to make use of the low prices chance. Therefore, they make a lot of sales throughout the year more than their competitors due to the low prices. It is, therefore, possible to illustrate that the Walmart management is well aware of the market rules concerning the demand and supply of goods and services in the society.
Walmart has helped to shape the economy of America in various ways. For instance, minimal wages for the employees ensures that there is only the required amount of currency flowing in the economy. When there is a lot of cash circulating through the economy, the currency value reduces and inflation increases thereby distorting the economy of America. As a result, if the American economy collapses, then in means that there will be either a low-value currency which would cause slow business for Walmart, or there could be a total loss in business and merchandise for the company. (McMillan, pp 143)Therefore, if the American economy collapses, there will be dire consequences for Walmart Company.
Finally, price elasticity of demand is a concept that investigates the degree of responsiveness with a specific change in prices when the other determinant factors are held constant. Walmart tends to prosper concerning merchandise sales due to its elasticity in demand and supply. They sell a variety of products in the market. Those products have a very high elasticity which makes the major corporation’s attraction of customers. If for instance the company needs to increase their sales by say 40%, then regarding elasticity, they would need to reduce the market price so that they can increase the quantity demanded.
Works Cited
Ferrell, O C, John Fraedrich, and Linda Ferrell. Business Ethics: Ethical Decision Making and Cases. , 2015. Print.
La, Porta R, and Andrei Shleifer. The Unofficial Economy and Economic Development. Cambridge, Mass: National Bureau of Economic Research, 2008. Internet resource.
Kipple, Andrew, Adam Kipple, and Luke Wherry. People of Walmart: Shop and Awe. Naperville, IL: Sourcebooks, 2010. Internet resource.
McMillan, Tracie. The American Way of Eating: Undercover at Walmart, Applebee's, Farm Fields, and the Dinner Table. New York: Scribner, 2012. Print.
