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When disasters hit an area, the cost of everything seems to go up immediately: food, water, housing, gas and so forth. Explain why this phenomenon may be a good thing, using the laws of supply and demand to explain your answer

  • business -

    If there is a lot of something (big supply) there is more than people want (low demand) but if there is a short supply, and a HUGE demand, of course the price goes up!


  • business -

    When a disaster hits an area the demand for many goods and services will rise. These goods ara mostly basic necessities and demand will rise for them as a result of the disaster. This demand is likely to be stimulated by the people who were directly affected by the hazard. This is a good phenomena as producers see that demand for their products is expanding and so they charge higer prices knowing that people have little alternative but to keep on buying.

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