Friday, February 3, 2017

What happens when bad weather causes availability issues?

http://www.bbc.com/news/uk-38851097

"Tesco is limiting shoppers to three iceberg lettuces, as bad weather in Spain caused 'availability issues'.
"Morrisons has a limit of two icebergs to stop 'bulk buying', and is limiting broccoli to three heads per visit.
"Prices have also risen, with Lidl's iceberg lettuce up to £1.19 from 42p."
This is a textbook case of the types of things that happen when supply decreases. Here are two questions to ponder.
  1. Would Tesco and Morrisons need to limit shoppers if they increased price even more?
  2. Why do Tesco and Morrisons limit the increase in price and restrict how much shoppers can buy instead of raising price even more?

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