Two Mitten Makers in Silver Run
Silver Run is a snowy town in northern Maine. Each winter, families, school groups, and road workers look for warm mittens. The town's mitten market includes the people who buy mittens and the businesses that make and sell them. The mittens are made and sold in the United States, so this small exchange is one example of the U.S. economy.
Two businesses serve many of the same buyers. Polar Loop Cooperative employs six local knitters. Its mittens use thick wool and come in several colorful patterns. Summit Stitch Works is in Northfield, a town about 30 miles away. Machine operators there make lined mittens with waterproof cuffs. Both businesses send mittens to a Silver Run outdoor store. A shopper can compare the price, fit, warmth, and design before choosing a pair.
The two businesses make some different choices. Polar Loop makes small batches and can change a pattern quickly. Summit Stitch can use its machines to make many pairs in a short time. If one business offers a lower price or a useful feature, some buyers may choose its mittens instead of the other business's mittens. The store keeps track of which pairs sell and shares that information with both makers.
Conditions can change during the season. One week, a truck carrying yarn to Polar Loop arrived late. The cooperative had fewer pairs ready for the store. Summit Stitch had extra yarn and offered to send more mittens. Later, a school snowshoe club ordered 20 pairs for a trip. The store asked both makers whether they could prepare additional pairs. After two weekends when nearly every mitten sold, Polar Loop's members discussed training two more knitters. Summit Stitch considered running its machines for an extra evening.
The owners also watch the weather. During a very warm January, fewer people may want thick mittens, so the store may order fewer pairs. During a long stretch of deep cold, more people may look for them. The two makers must decide how many mittens to make, what features to offer, and what price will attract buyers while covering their costs. Buyers and sellers respond to one another as they make these decisions.