This is part 2 in my series called “Economics 101”. If you’re interested, you can start with Part 1- Sunk Costs and Opportunity Costs.
Over the summer, I listened to a great podcast called Planet Money. They did a series called “Summer School” which covered a lot of basic economic concepts – and how they can relate to everyday life! So I’ve decided to cover a few concepts as well, using their series as a starting point.
Today I’m going to talk about supply and demand. Supply and demand is a theory in economics – it explains the interaction between the people selling a resource and the people buying it. So – if you have a low supply of things and a high demand – prices are going to go up!
1. Toilet Paper
2. Nintendo Switch
If you’re not familiar with the Nintendo Switch, it’s a video game system – as it has a lot of family-friendly games. The perfect thing to have if you’re going to be stuck inside for weeks on end with your family. I thought about buying on myself at Christmas – but hoped the prices would go down. Not a good move on my part!
Because of production lines shutting down, Nintendo Switches quickly ran out – and the only way you could get one was to pay a very inflated price – sometimes even two times as much as the original costs. Even Nintendo Switch games were hard to find for a while.
Unlike toilet paper, Nintendo Switches are still very hard to find – and if they do come into stock, they quickly sell out.
The Takeaway
