Australia is now facing an egg shortage before Christmas due to an outbreak of bird flu, which infected over 450,000 chickens. Producers are panicking because demand is increasing significantly due to Christmas approaching, and prices have already started to rise. A farmer even states that he is not exaggerating that the eggs this year will not be there. Why will there not be sufficient supply of eggs in the market during the week of Christmas in Australia? The relatively inelastic demand for eggs in Australia spikes during the holiday season of Christmas. The market for eggs has a very inelastic demand, because it is a necessity and not a compliment. During the week of Christmas, ABC states that the demand doubles, which will lead to the price increasing. Inelastic demand is how unresponsive the quantity demanded is to the market price; so demand for eggs does not change when the price fluctuates. The graph above shows the demand curve double from D1 to D2, as stated by the news article. A demand curve is a graph of the relationship between the price of a good and the quantity de...
Inelastic demand means that an increase or decrease in price will not significantly affect demand for the product. In spite of the rising prices for the Blue Jays tickets, fans were expected to turn out in large numbers. This inelastic demand for the tickets can be attributed in large part of the fact that their teams plays so well in 1998, and another factor is that the Blue Jays fan could never stay away from their team. Another inelastic demand for the Blue Jays tickets is that there is no other locally substitute team.
This can be generalised in this basic explanation: Most primary production takes place in Rural Australia. When the producers (for instance farmers/graziers/miners) aren’t making sufficient income from their businesses to provide a profit they reduce spending. Falling profits can be caused by numerous factors for instance: a poor season’s harvest, reduced prices at market for their products, increased costs in production or in transport, among other reasons. There are various avenues open to producers in this circumstances but the most common is to restructure their business by reducing the staff they employ and lowering expenditure by reducing purchases of new equipment, goods or services. This reduction of spending flows on to supplying business in the region that relies on this custom for their profits. These other businesses then have to change the way th...
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
Secondly, is the supply of free-range eggs increase. Because of the strict requirements on free-range eggs, such as the limitation of the number of hens in the certain size of hatcheries. Farmers were not willing to invest more in order to meet the demand of free-range eggs. Moreover, because free-range hens lay less amount of eggs in the winter months, the productivity of free-range eggs will decrease, which cause the problem more serious (Mannix 2016).
Although Disney has nothing else more to offer for higher prices, people will still go. London states “by having the same price all year round, there is less of an incentive to take children out of school in search of a cheaper holiday.” The supply of tickets at Disney is still the same, it is the demand that is different. This article also connects with the concept of elasticity, according to Cowen, “the elasticity of demand is a measure of how responsive the quantity demanded is to a change in price” (71). Although Disney raises their prices during the summer, the demand still stays the same, meaning that it is less elastic. The more responsive the consumers are to the price change, means that it is more elastic. The Disney tickets would be considered inelastic because the quantity is insensitive to the change of price.
Before I came to Australia, I did some backgrounds preparation and familiarized myself with its landscape, accent, animals and etc. So when I arrived in Sydney in January, everything is anticipated, except Australians’ mighty passion on celebrating the Australia Day. Despite my shallow understanding of Australia’s history, I am entirely affected by the atmosphere. I can still remember the busy city swelled with parades and many people had their face painted or wore flag capes. All the barbeques, fireworks, and people’s excitements make the event like a giant carnival. And interestingly, similar things happened again in the following Anzac day.
The law of demand tells us that "Quantity demanded rises as price falls, other things constant, or alternatively, quantity demanded falls as price rises, other things constant (McGraw 2004). The XBOX 360 phenomenon that took place in 2005 is a good example of this economic principle at work. Microsoft's XBOX 360 gaming console was released into the U.S. market on November 22nd 2005. The release came after a great deal of advertising and media hype that ensured that the demand for the product would outweigh the supply. Quite simply, there were more consumers wanting to purchase the product than there was product available. The retail price for the gaming system with a hard drive was $399. Many consumers, however, paid a great deal more than the $399 sticker price to acquire the system. On the morning of the U.S. release, retailers across the nation sold out of the product within just a few hours of opening their doors to consumers. In the weeks that followed however, many consumers purchased the unit from sellers on on-line auction sites and even from individuals in parking lots for as much as $1500. The reason for this was that the supply was significantly less than the demand for the product. In some cases, parents who wanted to ensure that their children received and XBOX 360 for Christmas in 2005 were willing to pay well over retail for the hard-to-acquire system. In other cases, video gaming enthusiasts wanted to be among the first individuals to own and play the system. News reports across the nation showed footage of people lining up days ahead of November 22nd in order to secure a place in line at retailers that would have the product available on the release date.
The law of demand states that if everything remains constant (ceteris paribus) when the price is high the lower the quantity demanded. A demand curve displays quantity demanded as the independent variable (the x-axis) and the price as the dependent variable (the y-axis). http://www.netmba.com/econ/micro/demand/curve/
The major difference between these two items is the rarity of diamonds compared to a product like toothpaste. An item is inelastic when, “ price and total revenue move in the same direction”(McConnell, Brue, Flynn. Pg. 126. para. 3). The rise in the price of the product, in this case diamonds, doesn’t tend to affect the revenue since there are almost no substitutions. What is also common in inelastic demand is that when price declines, and what could happen with diamonds, is that the gain of sales will not match the total revenue of the price of the item did not
In the case of the region’s microwave ovens, elasticity (EM) is figured at 0.0700. The outcome depicts that a 1% expansion in the quantity of broilers prompts to a 0.07% expansion sought after. The resultant ramifications are that demand portrays in-elasticity.
Figure I I .4 illustrates the effects of an increase in demand. OD is the original demand curve so that the equilibrium price is P and quantity Q is demanded and supplied.
The economic situation is an environment to be considered when analyzing consumer behavior for this product. Disposable income is very important to ice cream consumption. Since ice cream is typically considered a luxury good, one’s disposable income will affect their demand. Generally, when the price of a normal good increases one will consume less of that good, if the price decrease one will consume more. However, these prices are relative to the consumer’s disposable income. For example, if an individual receives a raise and their disposable income changes from $50 a week to $100 a week, their opportunity cost of buying ice cream may decrease, causing an increase in their demand for ice cream. This can happen even though the actual price remains the
That is, it is sensitive to price change, and also to the quantity demanded. This means that if many people are consuming a good, the demand is greater than if less people are consuming the good. To further clarify, take the example of attending college. In an environment where most of an individual's peers are going to attend college, the individual will see college as the right thing to do, and also attend college to be like his peers. However, in an environment where most of an individual's peers are not going to attend college, the individual will have a decreased demand for college, and is unlikely to attend.
The concept of Price Elasticity of Demand (PED) measures the responsiveness of quantity demanded by consumers to a change in product price. It is used by businesses to forecast sales, set the most effective price of goods and determine total revenue (TR) and total expenditure (TE). Similarly, governments also use price elasticity of demand when imposing indirect taxes on goods and setting minimum and maximum prices. Marginal revenue is also determined by the price elasticity of demand. Price elasticity of demand is used to predict the quantity shift in the supply curves and the effect on price for a product, and is usually always negative as it is the relationship between price and quantity demanded is an inverse one. PED is measured by calculating