Food Shortage : Restaurants Raise Prices, Drop Items Written By Margery A. Beck
1812 Words8 Pages
1.0 Article Summary
The article, Egg Shortage: Restaurants Raise Prices, Drop Items written by Margery A. Beck of The Associated Press and published by the NBC News dated June 22 2015 discusses the expected increase in prices of eggs due to the bird flu virus. This virus has wiped out millions of chickens at commercial farms resulting in a shortage and an inability by producers, wholesalers and buyers to get enough eggs and egg products to supply the market and meet consumers’ needs. In addition, because of the virus, all farms must undertake testing by Federal Safety officials to ensure the product is safe, which has led to production costs increasing by 15%. To counteract this, restaurant owners in particular who have eggs on their…show more content… The demand for necessities tends to be inelastic, since people will have to purchase at least a certain amount of these goods no matter how much the price increases. In relation to the article, restaurant owners would consider eggs a necessity as their business would suffer without it.
The demand curve is a diagram that indicates the relationship among the price of a good and the quantity demanded of that good, when everything else remains stable (Curtin University 2014). As the law of demand affirms, when the price of a product rises the quantity demanded decreases, and when the price of a product falls, the quantity demanded increases (Hubbard et al. 2013). In this instance, as pointed out within the article and shown in Diagram 1 the consumers will have to pay more for a case of eggs due to an increase in price of a case of eggs from $18 to $40 in just a few weeks. One factor that shifts demand to the right is taste for the good.
On the contrary, the supply curve is a diagram that indicates the relationship of a product and the quantity supplied of that product, when unpriced variables stay the same. The law of supply affirms that when the price of a product rises the quantity supplied increases, and when the price of a product falls, the quantity supplied decreases (Curtin University 2014). The article outlines that bird flu has caused a shortage and an inability to get eggs and egg