Metro warns that unless Washington-area jurisdictions increase their subsidy to the transit agency by more than 10 percent for the next fiscal year, subway riders could see cutbacks in service.

Metro officials have drafted a budget for the next fiscal year that includes a contribution of $892 million from the jurisdictions it serves — a 10.3 percent increase over the current subsidy — to help the transit system meet its operating costs.

In a spending plan to be presented this week to the Metro board’s finance committee, the agency’s budget staff anticipates rail ridership for the fiscal year that begins in July will be about the same as the current fiscal year.

That means, for the first time in several years, Metro is projecting no increase in fare revenue, while operating costs are rising, the agency’s financial staff said. As a result, Metro will need substantially more money from the eight counties and cities that help pay for transit operations, according to the budget proposal.

Metro increased fares this year, and they want to avoid another fare increase, although this is certainly a possibility.

Some board members already have balked at the idea of a large boost in subsidies. But if such an increase is not forthcoming, Metro spokesman Dan Stessel said, “then there are some really difficult choices that the board is going to have to wrestle with. And that’s when you start talking about running trains less frequently.”

The potential consequences are detailed in a section of the 40-page budget proposal titled, “More Aggressive Cost Cutting Needed If Funding Is Not Available.”

Translation: Fewer trains.

The overall budget proposal for the next fiscal year — calling for $3.1 billion in spending on capital improvements and day-to-day operations — will be made public Monday and formally submitted Thursday to the board’s finance committee, officials said. The overall budget this fiscal year is $2.9 billion.

A. (10) Draw a diagram for Washington Metro. Show me and explain what is happening in this industry as it relates to the reading. Be very specific as it relates to the changes in budgets, fares and trains.

B. (20) What are two alternative approach that Washington, DC, could use to solve this situation (two pricing approaches). Explain and show on the graph. What are the impacts of these changes. Explain.

Problem 4: BRIDES (40 pts)

frontdoorRunning of the Brides
All About Filene's Basement's Bridal Gown Sale

lei

By Lei Lydle, Founder and Editor

I'm sure you have seen it on television or at least heard about it – hundreds of women rushing to racks and racks of designer wedding gowns and trying them on in the aisles. I believe they made reference to it on "Friends" a few seasons back when Monica was planning her wedding to Chandler. Remember? All of the brides were running around grabbing dresses off the racks… brides, including Monica, were fighting over gowns…

I really can't remember if that was supposed to be Filene's or another store but it definitely wasn't something that was made for television. It is an actual event, a "wild scene", that has been repeated every year since 1947 at the world famous Filene's Basement in Boston, Atlanta and other cities around the country.

So what is the big deal about this particular bridal gown sale?

According to Filene's Web sitet , basement buyers accumulate gowns from a variety of sources including manufacturer's samples, overstocks, canceled orders, excess merchandise, etc. Many of the dresses still have their original price tags and may be priced in the thousands. So, when these buyers have accumulated at least 1000 gowns they set a date for the "sale" and price all dresses at $249 each.

The morning of the sale, brides, mothers and friends begin lining up early. Usually by the time the doors open at 8am, hundreds of women are waiting in line. According to the Web site, "when the crowd is let loose, it takes less than 60 seconds for the racks to be stripped bare". Evidently the women just grab as many dresses as they can, go off in a corner, strip down and start trying them on. Then the brides start bartering with each other for dresses until they find the perfect gown (for only $249).

Call me crazy but this sounds fun…and maybe a little dangerous at the same time 🙂

Tips For Success

Since this may be something new to you, following are some tips for success from the Filene's Web sitet and my comments as well:

1. Get there early or get there late. Evidently, there is a better selection early but less frenzy later.

2. Leave all men at home, but do bring female help. I imagine it could be strange for men since there will be hundreds of women stripping down right there in the store…

3. Identify your team. This is quite funny but I imagine it is helpful. The Filene's Web site suggests you and your "team" wear matching colors, hats, etc. (something that will help you find each other in a crowd…)

4. What to wear: Leotard or sports bra and bike shorts to try on dresses anywhere, sneakers of comfortable shoes…

5. Leave your handbags at home. Carry your belongings in a fanny pack or have a friend carry them.

6. Think creatively. Since these dresses are so inexpensive, it may be worth the cost of alterations if the gown you love doesn't fit perfectly.

7. Be open-minded. Certain dresses look best on certain bodies. Don't pass up a dress just because it isn't what you had in mind – it may look awesome on you!

8. Be courteous. This is just common sense. Everyone is there for the same thing – to find the perfect dress. If you are nice and help someone out they will be nice and help you – I hope!

9. Be fair. Again, everyone is there for the same thing. So give up your dresses as quickly as possible so that other brides have a chance to try them on.

10. Have fun! Hopefully you will find the dress of your dreams but if not, you will probably always remember your trip to Filene's.

My Experience At The Sale

Well I got up early to go check out the sale this morning. When I arrived at 7:30, hundreds of women were lined up outside of each entrance to the Filene's store here in Atlanta. Most that I asked said that they started arriving at 6:00 in the morning but some were there earlier and a few women started camping out the day before!

In addition to the groups of anxious women, there were also news cameras and vans, radio station personalities, bridal magazine reps, and security personnel all over the place. I really couldn't believe all of the media attention surrounding this sale!

Anyway, although I saw some women that appeared to be there alone, most were in groups and many chose to wear novelty head bands so they could find each other once inside the store.

At about 5 minutes before opening, the security personnel begin unlocking the doors. At that point, some of the women who were further back in the line started to come to the front. I was very surprised when the women closer to the front of the line yelled "No" almost in unison as is if it were planned.

I even witnessed a verbal argument between a mother-of-the-bride and an unrelated young woman. The mother had arrived early and had been waiting at the front of the line all morning. But as the 8am hour drew near, younger girls started inching toward the front. This particular young woman attempted breaking in front of this mother and a verbal argument ensued. I really wish I would have had my video camera!

So one or two minutes after that, a gentlemen that works at Filene's (possibly the manager) came out and addressed the crowd. He told the women not to run but to walk. He said that there were over 1000 dresses inside so there were definitely enough dresses for everyone to get a dress. Then he walked back inside and they opened the doors….

Evidently no one listened to the store manager's announcement because as soon as those doors opened the girls were off and running.

It took less than a minute for everyone to get inside the store. There was a traffic jam on the stairs and escalator. I even heard someone on the escalator screaming but I couldn't see what was happening because of the large crowd.

While everyone was trying to get up the stairs and escalators, I just leisurely got on the elevator with a few other clever brides and we got to the 2nd floor right away. Since I was taking photos, I didn't even enter the store until all of the brides had entered the store. Even so, it took me less than 2 minutes to enter the store and get upstairs to where the gowns were.

I have to say it was totally crazy up there. There were so many people, I couldn't even figure out where the gowns were. I later realized that I couldn't see the gown racks because the racks were already stripped bare!

Many women were carrying around as many gowns as they could hold. I saw brides that wore bikinis as underwear – pretty good idea. I also saw people carrying around signs that indicated what sizes they were looking for – another good idea!

Filene's has lots of dressing rooms and people were lined up waiting for them, but many many women chose to try on dresses in the aisles. There were lots of men and news cameras there but these women didn't seem to care. I even saw one news camera focusing in on and talking to one bride while she was dressing – I couldn't believe it!

I also saw the security personnel walking around holding up lost cell phones and pieces of lost clothing.

Due to the chaos (and large numbers of undressed women), I was unable to get any good photos inside. Trust me when I say it was a wedding gown frenzy!

The good news is that I saw several women purchasing gowns so I guess this sale/event was worth it for these brides. And it was a lot of fun too!

An Important Note

This sale is only a one-day sale and the gowns are not returnable.

QUESTIONS:

a. How does this market work/look and how does the market for wedding gowns usually look? (What is the diagram for this market? What is the diagram for wedding gowns usually?)

b. How many markets are there (in this one example)?

c. Is this market (or the many markets you see here) efficient? Explain.

d. If you were going to change this market a little bit (for whatever reason), how would you change it? Explain and show on a diagram.

e. Can you use any additional ‘price and prejudice’ ideas in this market (apart from what they are doing)? Identify three and explain them thoroughly.

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