I feel like I’ve been living under a rock because I had no idea Five Below existed until this year. It’s the best place to shop for gifts within a cheap budget and everything is five dollars or under!
Think of it as a higher quality version of the dollar store with more variety.
I usually pass by it on my way to work but for some reason I thought it was a bar since its name sounds like they’re describing cold beer.
So finally I decided to take a look and true to their word everything was indeed five bucks or under. Amazing.
Even a poor student like me can afford their stuff.
So how does capitalism relate to this? One major factor is competition.
In all the economics courses I’ve taken in college, they all said competition brings lower prices. How so? Better technology and manufacturing capabilities, like automation, helps lower the cost of production and operations and the savings get passed on to the consumer. Capitalism encourages competition.
Competition between businesses also help lower prices and it gives the consumer more choices. Think about how any business with competitors work, if they see one place lower their prices then they’ll follow suit.
We see this in action between theme parks. I live in Orlando, surrounded my Universal Studios, SeaWorld, and Disney. Whenever Disney lowers their ticket prices then everyone else will do the same in order to stay in business.
Consumers are naturally attracted to getting more stuff with less effort. Basically, people instinctively want higher quality items for a lower price.
More competition also means an unlikelihood of a monopoly forming.
This is just a basic example of how capitalism benefits everyone. You can learn more from the Mises Institute and FEE, the Foundation for Economic Education.