Market: Dallas Rentals
Demand has been steadily increasing over the past years and supply has been increasing to match. As a result, rent has grown by 1.8 percent per year.
This increased demand has been a result of job growth. A textbook example of an increase of buyer’s income increasing the amount of people able to purchase a good, in this case, renting homes in Dallas. As this demand has been increasing, more rental housing has been built to keep the supply at the same pace. Because of the supply-demand ratios being kept much the same, price has hardly increased. Current rent rates for two-bedroom apartments are $1 100, which is less than the national average. Also, rent rates are increasing at a slower rate than the country’s average, Dallas being 1.8% and the national average being 2%.
Source: Red chilli prices crash 40% in two weeks
Chilli prices in Telangana, India have dropped by over 40% in two weeks due to a surplus of the good.
The chilli market in the country has increased, on average, 50,000-60,000 bags (of 40-50 kg each) a day. This means there has been a large increase in the number of sellers in the market. This moves the supply curve to the right and creates a surplus in the market, dropping the equilibrium price of chilli dramatically. The price dropped from ₹12,500-₹13,000 about two weeks earlier to ₹7,000 a quintal.
Market: Sugar cane juice
The price of sugar cane juice in Singapore has increased due to a shortage of sugar cane.
This shortage is due to several factors, such as a decrease in workers at plantations because of legal issues (cost of factors of production increase) and farmers deciding it’s more profitable to focus on other crops such as durians or pineapples (decrease in number of sellers of sugar cane). Furthermore, a flood and a fire at two of the biggest sugar cane plantations who supply to Singapore have brought them extra costs and a decrease in sugar cane.
Sellers have increased their sugar cane juice prices because of the increase in sugar cane prices (which were S$14 in December, and are now S$26, increasing the costs of factors of production of sugar cane juice, decreasing the supply). One seller of the popular drink raised his price from S$1.50 to S$1.70 to keep the same profit margin.
Source: Coffee prices go up as minimum wage rises
On April 1st 2018, the government in New Zealand raised their minimum wage rate $0.75, from $15.75 to $16.50 per hour, benefitting 164,000 workers. In response to this new minimum wage, Mojo Coffee, a coffee house that has 31 locations around the country raised their coffee prices per cup by around $0.10.
In this situation, the demand determinant, buyer’s income has been affected, since the minimum wage in all of New Zealand has been raised significantly. This then will make companies increase their product prices, in this case, Mojo Coffee increasing coffee prices. Coffee in this sense is a normal good, since for the past couple of days, Mojo Coffee has had positive customer feedback, and satisfaction, even after the increase of coffee prices.
This is why the demand curve shifts to the right. Now the new equilibrium point has both more quantity supplied at a higher price.
Source: Toronto’s Housing Shortage: Is It The Result Of Policy?
The number of new homes available in Toronto has dropped drastically compared to a decade ago. This is assumed in part by developers delaying construction due to anticipation of higher prices as well as the growth plan established in 2006. The growth plan was implemented in order to keep urban sprawl in check while also growing Toronto as a major economic hub. People were supposed to start moving into condominiums rather than single-family homes, however the opposite has actually been true. This imbalance has created a supply-demand mismatch, resulting in less growth than before the plan.
These problems have also led to approximately 42% of city’s young professionals are considering leaving. This would only increase the problems in the future and is a big concern for current municipalities.
Rising Hummus Prices? Blame a Drought Half a World Away (Feb. 2018)
The cost of hummus in Britain is rising. According to the article, the average price of supermarket hummus was 12% higher than it was a year ago.
This is in large part because of an ongoing drought in India, the largest exporter of chickpeas (the main ingredient in hummus). This caused a change in a supply determinant – the cost of factors of production – as the cost of producing chickpeas increased. This caused the supply of hummus to decrease. In other words, the supply curve shifted to the left, meaning that the equilibrium price increased and the equilibrium quantity decreased. In layman terms, the drought in India devastated chickpea crops, raising the price of chickpeas, which in turn made hummus more expensive to produce, so producers needed to sell hummus at a higher price and/or sell less hummus in order to get the same profit they were experiencing before the drought.
Another cause of the increase in price is a change in Consumers’ Taste, a demand determinant. As hummus has become more and more ubiquitous, more Britons desire to buy it on a regular basis. This means that the demand for hummus has increased, and the demand curve has shifted to the right. In addition to causing an increase in the equilibrium price of hummus, this has also caused the equilibrium quantity to increase.
Ultimately, the shift of the supply curve to the left, and of the demand curve to the right have resulted in a total increase in the equilibrium price, and total decrease in the equilibrium quantity.
Market: “Wagyu” Beef
Wagyu, or Japanese beef, is widely considered to be the most premium beef on the market, and can be found in high-end restaurants worldwide for its “melt-in-your-mouth” quality. Despite declining domestic demand in Japan, the price of Wagyu beef has boomed to record-high prices. Since 2010, the price of Wagyu beef per kilogramme has skyrocketed from 2,100¥ to almost 3,000¥, or from $25 to $35 CAD. Rising Japanese beef prices have been caused by both an increase in international demand and a steady decline in Wagyu supply.
Demand for Wagyu Beef has seen a significant increase due to both a change in consumer tastes and a rising number of buyers. More specifically, the variety of beef has become incredibly popular with renowned chefs and “foodies” in Europe and Hong Kong, who prize Wagyu Beef for its unique taste and quality. In addition, the number of Wagyu importers has skyrocketed over the past year, leading to a 40% increase in Japanese Wagyu beef exports. Buyers in the US, Hong Kong, Taiwan and Singapore currently make the up the bulk of new buyers. Both these determinants have contributed to a rightward shift in the demand curve.
Supply for the premium beef has seen a significant decrease due to rising costs of factors of production and number of sellers. Farmers raising Wagyu cattle in Japan are beginning to age and retire, and their successors often have no interest in continuing to run farms. In 2017, the number of beef farms in Japan declined almost 40%, while cattle numbers also dwindled, falling 14%. Raising Wagyu Beef is also incredibly expensive for the average farmer, costing almost four times as much to own and operate than a conventional cattle farm. Both these determinants have contributed to a leftward shift in the supply curve.
Overall, the rightward shift in the demand curve and leftward shift in the supply curve have caused the equilibrium price to increase. However, because the extent of the shifts are unknown, a shift in equilibrium quantity cannot be determined without further data.