Supply and Demand. Mathematics & Economics Term Paper

Supply and Demand
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Supply and Demand
In a free economy, demand and supply are crucial since they determine the price and quantity of products required by consumers. In particular, demand refers to the unique characteristics of a service or good that make individuals decide the price and amount to consume. Some determinants of the quantity demanded are income level, prices of commodities or services, consumer preferences, and demographic characteristics (Rittenberg & Tregarthen, 2009). On the contrary, supply refers to the quantity of goods that sellers or distributors are willing to provide in the market. The primary determinants of supply are a high price and the production cost. By using the supply and demand economic principle, the paper explains the possible shortage of toilet papers in some parts of the world, such as the United Kingdom (UK) and the United States of America (USA), due to the coronavirus pandemic.
Amanda Snell asserts that many retail outlets, stores, and supermarkets do not have toilet paper on their shelves. Before the current crisis, this product was readily stored on shelves waiting for potential customers to purchase it. However, as the rate of spread of the coronavirus increases in the USA, many Americans have decided to purchase large quantities of products that they consider essential and stock them following the directive by the government to self-quarantine (Snell, 2020). Indeed, the desire for hoarding commodities during a pandemic is natural, although it leads to the scarcity of essential products for some individuals. Many stores have reported a shortage of various commodities that are in high demand, such as hand sanitizers and toilet papers, during this time when numerous countries are declaring partial or total lockdown.
Panic buying leads to one significant problem, which is price gouging. Specifically, price gouging entails the phenomenon where greedy business owners increase the price of products during crises. After the existing products that were stocked have been bought by consumers for stockpiling, prices of such commodities are likely to rise as firm owners take advantage of ...