Final answer:
A 10% discount on sweaters does not guarantee the lowest price, as it depends on competitors' pricing. A price reduction example from Coolshirts illustrates how to calculate a 10% discount, but the impact on demand is not predictable due to market variations.
Step-by-step explanation:
The statement suggesting that a discount of 10% on the clothing store's selection of sweaters will ensure the store is offering the lowest price is not necessarily true. Whether a 10% discount leads to the lowest price depends on the pricing of competitors and the original price point of the sweaters compared to other stores. To analyze the effect of a 10% discount, we need to perform a percentage calculation.
For example, if Coolshirts, the t-shirt company mentioned, reduces the price of their $9 t-shirts by 10%, the new price per t-shirt would be $9 - ($9 × 0.10) = $9 - $0.90 = $8.10. This decrease in price might lead to an increase in quantity demanded, as per the law of demand in economics. However, whether another 10% decrease in price results in an identical 8% increase in demanded quantity isn't assured due to variables such as consumer behavior and market saturation.