Everywhere, everyday, supply and demand affect our lives.
Econlife Blog
https://econlife.com/2021/04/covid-shortages-of-heinz-ketchup-packets/
Fact Questions:
- Why are we consuming more ketchup?
- Why are we using more ketchup packets?
- How has Heinz responded to the increase in ketchup demand?
- How have bars and restaurants responded to the ketchup shortages?
- How has demand shifted among retail and commercial ketchup users?
The Economic Idea: Supply and Demand
In our daily lives, everywhere, we see the impact of supply and demand. To an economist, supply is defined as the quantity of goods and services that producers are willing and able to create at different prices. At the same time, demand refers to the quantity of goods and services that government, businesses, and consumers are willing and able to buy, depending on the price.
With ketchup, supply and demand have touched our lives. On the supply side, Heinz was willing and able to produce what they expected would be a sufficient amount. Too much or too little could diminish their profits. Meanwhile, because of the pandemic, our demand for ketchup increased. More precisely, because we were home more of the time, takeout became more popular. As a result, we needed extra ketchup packets.
Similarly, during the pandemic supply and demand changed for toilet paper, flour, face masks, restaurant meals, and a slew of other goods and services.
We could say that we were experiencing the power of the market.
Activity Goal: To become more familiar with everyday supply and demand.
Procedure: A cartoon drawing exercise.
- If you are in a class in school, divide into groups of three to five students. Select a scribe and a group leader.
- If you are working remotely, each student should follow the directions that follow in #3.
- In your group or individually, your task is to draw a cartoon sequence that illustrates how supply and demand interact.
- To begin, select one of the following goods or identity another item:
Gum, gloves, gasoline, potato chips, t-shirts
- In the first box of a cartoon sequence, have a person decide to sell the item you chose. That person can say, “In my new business, I think I will sell some …….
- In the second box of the sequence, name a price.
- In the third box, start to illustrate demand by having people buy the item (and commenting on its price.)
- In a fourth box, create some competition.
- In subsequent boxes, have your story unfold, further illustrating either how supply and demand interact, or changes in supply, or changes in demand.
- Re-gather as a class.
- Share your cartoons.
- Decide what the cartoons convey about the power of the market. Where and how does it influence decisions though incentives?
