Kevin Greenlee
Dr. Baugus
Micro Economics 120
November 24, 2021
Economics in Christmas
The Christmas season is near and dear to many people, as it is a time of giving gifts and spending many precious moments with family members. This is a time where people can step away from their busy lives and relax while enjoying all the festivities. However, there are a lot of economic concepts and ideas going on around this time of year as well. The free market has allowed just about everyone to enjoy the Christmas season, which in turn allows people to signal gifts to one another similar to how customers signal to businesses.
The fact that most Americans have the ability to spend Christmas with their families and enjoy time off from work while spending an increased amount of money is a good indication of how well the free market economy works. This is because the free market was able to create wealth for so many people, which was not the case in the past, as economist Christopher Coyne says “Not long ago, only the wealthiest people in society—the elites—could even think about such things as giving gifts or spending leisure time with their significant others.” (Coyne, 2020). This is obviously not the case today, as virtually everyone can celebrate Christmas in some regard.
Furthermore, now that most people are wealthy enough to celebrate Christmas, there is a lot of signaling going on during the Christmas season. In many relationships, the male is comically known as the one that fails to pick up on the signals that are coming from the girl he is in a relationship with. People will begin to hint at what they want for Christmas or something they are interested in and it is the gift-givers job to recognize these signals and buy the perfect gift. Well, the same is true in the market, as people begin to signal what they want to businesses through a variety of avenues. If the business wants to succeed they need to recognize these signals and accommodate the customer in order to be profitable. Christmas is a great illustration of that, as the gift receiver signals to the gift giver what they want; therefore, if the gift giver wants to be successful he/she should accommodate what the gift receiver wants.
In conclusion, Christmas is a time of great joy for many people and a lot of people are able to enter into the full festivities of the season because of the free market system that has been set up in America. Furthermore, Christmas provides a great illustration of how customers signal to businesses and how those businesses should respond if they want to be successful at all. Christmas is a demonstration of how well a free market economy can work as well as an illustration of how customers and businesses interact with each other.
Work Cited
22, Romy HaberNovember, et al. “Some Economics of Christmas.” Students For Liberty North America, 10 Dec. 2020, https://studentsforliberty.org/north-america/blog/some-economics-of-christmas/.
I love this example of how customers signal to businesses their needs. When a business is out of a certain product, they know that the customer wants more of that product. Customers purchasing something from a business is the way that consumer signal to a business their needs. The Christmas season is a good way for the customer to business relationship to be developed due to the increased buying and selling season that is occuring.