No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Monday, October 6, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Economy

The Second Law of Demand and Supply in Action

by TheAdviserMagazine
6 months ago
in Economy
Reading Time: 2 mins read
A A
The Second Law of Demand and Supply in Action
Share on FacebookShare on TwitterShare on LInkedIn


It’s no surprise egg prices are soaring.  In October 2024, UMASS – Amherst economist Isabella Weber argued that price controls are needed to keep prices under control and, further, that the controls would not have the negative effects we usually predict, such as shortages, deadweight loss, etc.  I responded to her claims here.  One of the points I raised was:

Furthermore, since the price being kept artificially low disincentivizes the supply curve from becoming elastic and/or growing, the costs of price ceilings persist longer than they would otherwise.

Four months later, we see this in action.  The high prices of eggs are causing people to consider turning to backyard chicken coops or even renting chickens.  This is an example of the Second Law of Demand: “Elasticities of demand with respect to price are greater the longer the time after a price change” (Universal Economics by Armen Alchian and William Allen, p 116).  In other words, the longer prices remain relatively high, the more people will search out or develop substitutes, making the demand curve more elastic.  The same holds true for supply: the longer prices remain relatively high, the more creative people will be to bring supply to the market.  When eggs were $0.99 a dozen, it made little sense to have a backyard chicken coop, which has start up costs of thousands of dollars.  But, with egg prices pushing the double-digits (a dozen large eggs are selling for $9 at my local store), now the relative price of backyard coops has fallen and people are turning to that alternative.  The demand for eggs is becoming more elastic.  Same with supply, as we see people with coops selling or giving eggs to their neighbors.

With price controls in place, this process would be much harder.  The market is moving toward a solution.  Price controls would have slowed this process.  Rather than ending shortages and controlling inflation, Weber’s proposal would have just turned the visible costs invisible.  

Update: The price of eggs has fallen since I originally wrote this piece.  The price of a dozen eggs at my local store is now (as of 3 April) $5.79.  However, I will not change the original post because the drop supports the point I am making here.



Source link

Tags: ActiondemandLawSupply
ShareTweetShare
Previous Post

CAG Earnings: Highlights of Conagra Brands’ Q3 2025 report

Next Post

Trump tariffs leave Northern Ireland, and its whiskey and plane makers, at the whim of the EU

Related Posts

edit post
Millions Sign Petition To Dismantle UK Digital ID System

Millions Sign Petition To Dismantle UK Digital ID System

by TheAdviserMagazine
October 6, 2025
0

The people of the United Kingdom are fighting back against the government’s plan to roll out a digital ID system....

edit post
KLG: Naked Capitalism – Your Essential Community

KLG: Naked Capitalism – Your Essential Community

by TheAdviserMagazine
October 5, 2025
0

By KLG I cannot remember how, but I found Naked Capitalism in the aftermath of the Great Financial Crisis, but...

edit post
The Sunday Morning Movie Presents: The Man Who Laughs (1928) Run Time: 1H 54M

The Sunday Morning Movie Presents: The Man Who Laughs (1928) Run Time: 1H 54M

by TheAdviserMagazine
October 5, 2025
0

This is Naked Capitalism fundraising week. 935 donors have already invested in our efforts to combat corruption and predatory conduct,...

edit post
Trump Takes Next Step To Bring Us To World War III

Trump Takes Next Step To Bring Us To World War III

by TheAdviserMagazine
October 4, 2025
0

Trump is clearly listening to the NEOCONS, and he may believe their BS that Russia’s economy is collapsing, so Russia...

edit post
Individualism and the Violence of the Identitarian Left

Individualism and the Violence of the Identitarian Left

by TheAdviserMagazine
October 4, 2025
0

Many people were shocked to see the identitarian left erupting in ghoulish celebration when news broke that Charlie Kirk had...

edit post
The Economics of AI: Dispelling Fears and Embracing Entrepreneurship

The Economics of AI: Dispelling Fears and Embracing Entrepreneurship

by TheAdviserMagazine
October 4, 2025
0

Artificial intelligence dominates the headlines with equal measures of fascination and dread. Visionaries proclaim it will unlock human potential, while...

Next Post
edit post
Trump tariffs leave Northern Ireland, and its whiskey and plane makers, at the whim of the EU

Trump tariffs leave Northern Ireland, and its whiskey and plane makers, at the whim of the EU

edit post
LW Earnings: Key quarterly highlights from Lamb Weston’s Q3 2025 financial results

LW Earnings: Key quarterly highlights from Lamb Weston’s Q3 2025 financial results

  • Trending
  • Comments
  • Latest
edit post
What Happens If a Spouse Dies Without a Will in North Carolina?

What Happens If a Spouse Dies Without a Will in North Carolina?

September 14, 2025
edit post
California May Reimplement Mask Mandates

California May Reimplement Mask Mandates

September 5, 2025
edit post
Does a Will Need to Be Notarized in North Carolina?

Does a Will Need to Be Notarized in North Carolina?

September 8, 2025
edit post
DACA recipients no longer eligible for Marketplace health insurance and subsidies

DACA recipients no longer eligible for Marketplace health insurance and subsidies

September 11, 2025
edit post
‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

September 9, 2025
edit post
Tips to Apply for Mental Health SSDI Without Therapy

Tips to Apply for Mental Health SSDI Without Therapy

September 19, 2025
edit post
Everything you need to know about Fermi’s upcoming IPO

Everything you need to know about Fermi’s upcoming IPO

0
edit post
Millions Sign Petition To Dismantle UK Digital ID System

Millions Sign Petition To Dismantle UK Digital ID System

0
edit post
Russia Rejects Anti-Dollar Claims as Putin Defends BRICS Trade Strategy

Russia Rejects Anti-Dollar Claims as Putin Defends BRICS Trade Strategy

0
edit post
The Hidden Financial Stress of Aging Solo That No One Prepares You For

The Hidden Financial Stress of Aging Solo That No One Prepares You For

0
edit post
Oil prices gain 1% after lower-than-expected OPEC+ output hike

Oil prices gain 1% after lower-than-expected OPEC+ output hike

0
edit post
Taylor Swift’s ‘Show Girl’ smashes The Rock’s ‘Smashing Machine’

Taylor Swift’s ‘Show Girl’ smashes The Rock’s ‘Smashing Machine’

0
edit post
Millions Sign Petition To Dismantle UK Digital ID System

Millions Sign Petition To Dismantle UK Digital ID System

October 6, 2025
edit post
Russia Rejects Anti-Dollar Claims as Putin Defends BRICS Trade Strategy

Russia Rejects Anti-Dollar Claims as Putin Defends BRICS Trade Strategy

October 5, 2025
edit post
Oil prices gain 1% after lower-than-expected OPEC+ output hike

Oil prices gain 1% after lower-than-expected OPEC+ output hike

October 5, 2025
edit post
Stablecoin-Focused GENIUS Act Is Beginning of the End for Banks

Stablecoin-Focused GENIUS Act Is Beginning of the End for Banks

October 5, 2025
edit post
Bulls piling into emerging markets as momentum returns

Bulls piling into emerging markets as momentum returns

October 5, 2025
edit post
Dollar vs yen: Surprise in Japan’s leadership race to roil financial markets

Dollar vs yen: Surprise in Japan’s leadership race to roil financial markets

October 5, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Millions Sign Petition To Dismantle UK Digital ID System
  • Russia Rejects Anti-Dollar Claims as Putin Defends BRICS Trade Strategy
  • Oil prices gain 1% after lower-than-expected OPEC+ output hike
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.