Price of Bananas Rises

Last summer, the price of bananas went up 16%, which is a very significant amount. This was due to a change in the supply, as there was a smaller crop than there usually is. There was a disease that affected the health of the bananas and many plants died. The quantity demanded decreased as a result as a result of the price change. With fewer bananas to supply to consumers, the price went up, and only those who really wanted the bananas paid for them. The lower-value consumers didn’t buy bananas any more, as the price was higher than their willingness to buy. 

Link: http://www.dailymail.co.uk/news/article-2690852/Price-bananas-rockets-16-Costs-hit-smaller-crop-usual-fungal-leaf-disease-hitting-production.html

3 Comments »

  1. Nicky Tynan Said,

    November 6, 2015 @ 8:19 am

    This is an excellent example of the impact of an exogenous change in supply. You clearly explain the shift of the supply curve and the impact in terms of an increase in price and reduction in quantity purchased.

  2. mohacsia Said,

    November 21, 2015 @ 3:17 pm

    This was very interesting. As prices go up, sales go down because only the highest-value for bananas will buy. Essentially, it seems that those with lower opportunity costs will buy.

  3. Samuel Banuelos Said,

    November 23, 2015 @ 7:46 pm

    As a consumer of bananas, if prices were to continue to increase I would really take into consideration if I should buy one or not. Even though bananas are not really that expensive, no one likes paying more money for something that was cheaper before. The only reason one would continue to purchase the bananas would be if they have a high value for them. In my own regard, I would stop buying bananas and look for a replacement.

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