Supply & Demand in Your Life
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In this unit, we learned the basics of economics, and how supply and demand, scarcity and abundance affect the way goods and services exist in the world. Now, let’s talk about it.
According to a recent article in Forbes Magazine, “The demand for additional battery life is so large Pokémon GO is already having an impact on the sales of external batteries and phone cases with extra battery capacity.” Popular portable battery makers told Forbes that the sales of certain products have grown significantly, up to double or triple just in Pokémon GO’s first week in the United States. On a less technological front, coffee prices are up by 13 percent due to increased demand, and the supply of Corvettes is not sufficient to meet the current demand. All of these statements come from headlines from the past three months, indicating that the laws of supply and demand impact everything from your phone to your car to MY coffee. This is the basis for our discussion this week!
Choose an article on a topic (product/good/service) that affects your daily life. Briefly tell us what your article is about. Which aspect of the article’s discussion affects your daily life? What factors do you think are influencing the supply and demand of the product/good/service that is the subject of your article? Include the URL of the Web site where you found the article, so your classmates can access it.
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In order to receive full credit for this assignment, all components of this assignment are due by 11:59pm ET on Sunday, September 18, 2022. You should first contribute a thoughtful post of your own before viewing/commenting on the posts of others. Students should review others’ submissions and comment meaningfully (refer to this guide from MSSU for reference) to at least two other students. For reference, here is the difference between a comment and a post — you will be using both for this assignment.
Once you submit your post, you must respond meaningfully to at least two other classmates’ threads. This assignment is worth a total of ten (10) points — 6 possible points for your original post, and up to 2 points for each of the two responses to your classmates’ posts. Please reference our Discussion Rubric for more information.
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The article selected is “Covid-19 Wiped Out Disinfectants” by Jessica Guynn from USAtoday. This report addresses the disinfectant shortages specifically from the brands known as Reckitt and Protector and Gamble (P&G).
During the Corona Virus pandemic, there were shortages of numerous items, and after the entire country practically being told to quarantine, people started to panic buy. Panic buying is a reactive instinct to protect oneself and family in spans of hardship, which leads to the supply and demand of a company being incapable of their customer’s needs. People started to buy items in large amounts such as toilet paper, disinfecting products, hand sanitizer, canned goods, and more. In the Article from USAtoday, the article speaks of shortages of two specific disinfecting products, known as Clorox wipes and Lysol spray. Nationally, people started panic buying both these goods, and as a result, customers were restricted to the quantities they could purchase, prices also increased for these products that were heavily in demand and low in supply. This is known as scarcity, which exists when there isn’t a sufficient quantity of something, whether it is a good, service, or resource. With society having unlimited wants and limited resources choices are made, as in this situation, some people had to question if they needed the disinfecting products or food. Having to make the decision between the two is known as an opportunity cost defined as something given up to obtain a desire.
In my family, we buy both of these disinfectant goods that were always in supply in my household and there were always at least 2 or 3 in supply. We would also buy them wholesale, so there would be 3 to 5 of the products in one pack. The Clorox wipes are used on almost any of our surfaces, such as counters tops, deep freezers, walls, etc. The Lysol spray is typically used to disinfect our couches, hallways, and rooms especially after having people over. However, during the pandemic, there was no more wholesale purchasing and you had to purchase one item for a ridiculous price. We experienced the scarcity of these goods because of the high demand of other customers and the increase in expenses. However, scarcity is known to be everywhere since there is a finite amount of resources, during times like the pandemic is when it starts to become a problem.
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The amount, quality, and pricing of a product, as well as its marketing tactics, all affect consumer demand. A product’s price will rise if there is a rise in demand for it. According to a report, retail food costs would rise 8.9% in the first seven months of 2022, faster than they did during the same time periods in 2021 (1.9%) and 2020. (3.1 percent). According to the Bureau of Labor Statistics, a dozen eggs are now $2.94, up from $1.64 in July last year; white bread is now $1.72, up from $1.49; and a chicken breast is now $4.61, up from $3.5. several regions of the world have experienced issues with important crops. Brazil, the biggest supplier of soybeans worldwide, experienced a severe drought in 2021. This year, China’s wheat crop was among the worst ever. Fears over food security, which were heightened during the epidemic, have prompted some nations to stockpile essentials in order to prevent future shortages, thus reducing supply on the international market. After Russia invaded Ukraine in late February, the prospects for food prices significantly deteriorated. According to the U.N. food organization, prices in February and March both reached all-time highs. Nearly a third of the world’s wheat and barley, as well as two-thirds of its exports of cooking-useful sunflower oil, come from Russia and Ukraine. No. 1 in the globe is Ukraine.
This is related to my mother’s market trip following the Covid 19 outbreak. She came to the realization that many items now cost more money and that certain previous discounts were no longer available. The price of oil has increased, which is the cause of the price increase. The cost of the items must be increased in order to transport them from one area to another for freight and make a profit.
“All Food Categories Experienced Higher Inflation through July in 2022 Compared with 2021.”
https://www.ers.usda.gov/data-products/chart-gallery/gallery/chart-detail/?chartId=104517</span>
“Why Are Food Prices Going up? Key Questions Answered.”, Thomson Reuters, 13 May 2022, https://www.reuters.com/business/retail-consumer/why-are-food-prices-going-up-key-questions-answered-2022-05-10/</span>
Bushard, Brian. “Egg Prices Have Doubled to $2.94 a Dozen–Here’s How Inflation Has Affected Your Favorite Grocery Items.” “Forbes Magazine, 11 Aug. 2022,“
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The article I chose was published by the NY Times and the name is “$15 French Fries and $18 Sandwiches: Inflation Hits New York” written by Nicole Hong. (Link: https://www.nytimes.com/2022/08/08/nyregion/inflation-nyc.html?searchResultPosition=4)
When I read the title of this article and saw “$15 French Fries” I was dumbfounded and a little confused because if I remember correctly, fries are never more than $4 at McDonald’s. But as I was reading through it, I learned a bit more about why the food prices are rising in New York and what the buyers’ and sellers’ position are at the moment. It has been more than 2 years since the pandemic started but businesses have not fully recovered yet from the secondary effects.
According to the U.S. Department of Agriculture, the egg prices are projected to increase a 78% this year. And, if you love to have an egg with your meals like me, this is not very good news. The reason why the prices are higher is because one of the production factors has been decreasing since there was a bird flu outbreak that affected millions of chicken flocks in the United States. And we learned from this segment that this affects the Supply.
Another example that I would like to discuss is the prices at street carts, during the pandemic and right after, businesses closed their doors, schools had virtual classes, doctors’ appointments were difficult to get or were virtual. Let’s say a good spot for a street cart is where people walk by during the day, and since this wasn’t possible during the pandemic, many street cars were not in business. Now that we have vaccines and more places have been opening their doors, the street cars have come back with higher prices than before because the suppliers have more businesses to supply (more demand for supply) meaning an increase in the cost of production for street carts.
Some people might not really pay attention when buying something if there is an increase of 50 cents, but those 50 cents have meaning in the market, and we should pay attention to what is happening in the economy and how it affects our day to day.
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- Food affects not only my life but also the life of every person. Food prices rise in line with inflation. In recent years, there have been several events that have had a detrimental effect on inflation. For example, Covid has led to a large increase in food prices due to the shutdown of some companies, delays in delivery and quarantine. Many firms could not withstand such pressure and collapsed. In recent months, the prices of some products have risen again due to the war between Ukraine and Russia. Supplies of products from these countries as well as gas were stopped. In a normal calm time, when there are no global problems in the world, food prices depend on demand. For example, if a farmer has a big, successful harvest, he will likely lower the price a bit to create demand for a low-cost commodity in order to get the maximum benefit for himself. The article says that some products have risen in price by 38%. These numbers are shocking. If you buy something separately, it may not be so noticeable, but if you buy a basket of groceries that are most in demand (for example, eggs, meat, milk, juice, etc.), then the final amount will be significantly different from what you would have received a few months or a year ago. Although the minimum hourly rate of $15 has not changed since 2019. Consequently, living on the minimum wage becomes more and more difficult with every price hike. </span>Some people give their preference to cheaper alternatives, for example, they opt for regular products instead of organic, buy food and cook themselves instead of frozen cooked products, or opt for cheap chicken instead of expensive beef. I can say this because I work part-time at the grocery store. Over the past year, we have experienced a price jump several times. I can also note that some people use good saving strategies. For example, they are waiting for special offers and only then are they purchased by this product; Purchased wholesale products instead of single products. The price jump did not resettle all food products. Some are stable at the same level. It depends on some factors, for example, some manufacturers replace ingredients with cheaper ones or those companies that do not require import supplies, that is, those products that are produced in the country in which it is sold.
https://amp.cnn.com/cnn/2022/08/10/business/grocery-prices/index.html
- Food affects not only my life but also the life of every person. Food prices rise in line with inflation. In recent years, there have been several events that have had a detrimental effect on inflation. For example, Covid has led to a large increase in food prices due to the shutdown of some companies, delays in delivery and quarantine. Many firms could not withstand such pressure and collapsed. In recent months, the prices of some products have risen again due to the war between Ukraine and Russia. Supplies of products from these countries as well as gas were stopped. In a normal calm time, when there are no global problems in the world, food prices depend on demand. For example, if a farmer has a big, successful harvest, he will likely lower the price a bit to create demand for a low-cost commodity in order to get the maximum benefit for himself. The article says that some products have risen in price by 38%. These numbers are shocking. If you buy something separately, it may not be so noticeable, but if you buy a basket of groceries that are most in demand (for example, eggs, meat, milk, juice, etc.), then the final amount will be significantly different from what you would have received a few months or a year ago. Although the minimum hourly rate of $15 has not changed since 2019. Consequently, living on the minimum wage becomes more and more difficult with every price hike. </span>Some people give their preference to cheaper alternatives, for example, they opt for regular products instead of organic, buy food and cook themselves instead of frozen cooked products, or opt for cheap chicken instead of expensive beef. I can say this because I work part-time at the grocery store. Over the past year, we have experienced a price jump several times. I can also note that some people use good saving strategies. For example, they are waiting for special offers and only then are they purchased by this product; Purchased wholesale products instead of single products. The price jump did not resettle all food products. Some are stable at the same level. It depends on some factors, for example, some manufacturers replace ingredients with cheaper ones or those companies that do not require import supplies, that is, those products that are produced in the country in which it is sold.
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This article is stating how the demand of hand sanitizer has been affected by pandemic COVID – 19. The companies were forced to increase their production capacity by using pigging option. The alcohol – based sanitizer is a daily use product that helps in cleaning the household items and clean hands. It also kinds microorganisms that are harmful. The companies that sell the hand sanitizer are Unilever, P&G, Reckitt Benckiser and Henkel. The demand of the sanitizer’s is expected to increase more than 3.6 US billion dollars by the year 2026. The manufacturing companies started to use the pigging technology in order to enhance the production capacity.
The factors that raised the demand for the alcohol – based sanitizer because people were using it to protect themselves from the Covid – 19 infection. Even in new normal people are back to the office and using the public transport, the demand for the sanitizer increased. The supply of the hand sanitizer increased as many using a pigging technology for enhancing its production capacity. This technology helps in recovering the residual product from the pipeline at the end of the changeover batch. This gave flexibility in operation, ease as well as low – cost advantage to manufacturers. Due to the demand of the good hygiene as well as hygiene practices, the use of the sanitizer and house cleaning products increased. Even many companies introduce the range of sanitizer in their product after the increased demand which involved a company like Bell International Laboratories.
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A lot of changes have happened due to the pandemic. It was a difficult period for everyone… However, in my opinion, many people felt the value of the very simple things around them…and they learned to appreciate and feel the value of the simple things they have.
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Inflation has been affecting everyone at the moment. This article talks about why inflation rose in the past year. The government reported that consumer goods increased by 8.6 percent; this includes food prices, fuel, housing, and many more. During Covid-19, we were all home, and most people did not have high-paying jobs. After covid-19, people started earning more money, and it caused consumers to spend money on vacations or cars. Also, during covid-19, there were few goods that went around. For example, the shortage of computer screens or toilet paper affected companies, so they started charging more to avoid losing customers.
Additionally, the war in Ukraine affected the inflation of food and fuel. After the war started, oil prices increased by $110 per barrel. That being said, in the U.S, the gas prices increased by 48.7% in the last year.Another Article written by CBS News, states that food prices went up by 12.2% in the last year. New York, for example, has an increase of 9.1%. As a person that lives in New York, it has affected my daily life. For instance, I used to buy Turkey bacon, egg, and cheese for 4 dollars a few years back. A few days ago, I paid $8.50 for one bagel. Ice cream from the ice cream truck used to be 1.50 dollars, and now it’s 4 dollars. I used to work at Starbucks a few months back, and our prices increased by 20.41%. Our customers used to complain; however, we had no power over the prices.
links: https://www.cbsnews.com/newyork/news/new-york-city-inflation-new-high/
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The article chosen is “Coin shortage 2022: Nickels, dimes, pennies, quarters in short supply.” by Kelly Tyko from USA TODAY. https://www.usatoday.com/story/money/business/2022/04/01/coin-shortage-2022-cash/7241045001/
Remember in the middle of 2020 when “contactless payments” became the only form of payment for transactions? When the pandemic first hit, business closures crippled the US economy. The circulation of coins dropped significantly, resulting in the partial closure of the economy. When businesses started opening up again, the demand for coins exceeded the available supply. Keep in mind that many businesses also rely on cash transactions, such as grocery stores, laundromats, and gas stations. Notice how when you would walk into a store, they had signs that encouraged customers to pay with exact change, and some even had to convert to a “cash only” business. Many wholesale store businesses now have self-checkout kiosks that only accept card transactions.
A person like me was affected because I was used to cash transactions before the pandemic. However, my perspective has changed. With features like Apple Pay easily accessible to you on your phone, I find myself just tapping my phone on the pin pad these days.
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