Demand and Supply-pin chun

In my home country Taiwan, there are a lot of headings which are about typhoon and the change of price of vegetable in every summer time. We can use the concept of demand and supply to explain the phenomenon.

  When the central forecast releases the news which is about there is a typhoon is coming, the demand of vegetables will increase. It is due to the expectation of the consumers who anticipate the price of vegetables are going up. It is because consumers project that the typhoon will destroys the farmlands and the supply of plants may therefore is reduced. They afraid that the price of it will increase dramatically.

For demand, as expectation is the non-price factor, an increase in expectation of vegetables will cause a shift in demand from D1 to D2. At the same time the suppliers try to reduce the cost of  the damages, they will harvest the vegetables before the typhoon although they are under ripe. So the supply will increase and the curve of it will shifts from S1 to S2. At the same price level, P, quantity is therefore increased from Q to Q1.

  During the typhoon, the supply of vegetable will drops largely as the plants are destroyed. Demand of vegetables doesn’t change, so the price of it will climbs up with a drop in supply. The curve of supply will shifts from S1 to S2. And the price will rises from P1 to P2. At this period, vegetable is therefore said to be scarcity. However some suppliers want to earn the high profit at this period so they store the vegetables before typhoon comes. As the result, there may have a low price of vegetables after typhoon which caused by excess of supply. It is because after typhoon demand will shift back whereas the supply is too much that demand cannot  meet.

    To help with this situation the government can encourage the farmer  shift the land to the northern. Because the typhoon always come from southern of Taiwan . if they move some to Tauyuan for example which is the city that have a lot of flat lands. Or  the government can import some vegetable from foreign country during the emergency time. However it is very difficult to accepted by the society because it may lower the income that farmers could have.