People start to object enough supply of objects when the demands rise above an equilibrium level. According to them, it is simple to solve the problem by producing more than the usual amount of that object.
In other words, they simply fail to understand how the supply and demand model works. The best example of this situation is the pandemic of 2020 when toilet papers ran out of stock.
Why is Toilet Paper So Expensive?
People find a supply and demand model a little complex concept to grasp. But once you do, you do not question the manufactures about the short supply of products. The simple answer to the question that why is toilet paper so expensive right now is that the manufacturers have to produce more of them.
According to the above model, when the demand increases, manufacturers produce more than the usual amount. They can do this only if they can an increased price for the same product that has suddenly high demand.
Technical Reasons Behind Expensive Toilet Papers
The technicality behind this rise in toilet paper price is that the capital is in a fixed amount. The manufacturing companies are using it to make the product previously. This capital includes the plant that makes the product, the equipment that they use for it, and all machines.
Also, the factor of labor that is in the whole process of making is important. They help in the increased production of toilet paper.
Now, when the manufacturing company increases its number for more production, marginal productivity decreases. The number of labor that was working before is now no more useful for that level of productivity that they had.
This is why the number of laborers increases dramatically, thus diminishing marginal productivity. This thoroughly explains toilet paper is so expensive right now in comparison to the past.
In the current market scenario, this is the actual reason for such a sharp rise in prices. Other than this, there are two more which we will discuss in the section below. They will further explain to you how all this works, and why its result is the rise in the prices.
Fear Among Consumers
In countries like Cuba and Venezuela, there was a great fear among people that this situation will persist. They were sure that these things will run out of stock very soon. So, they thought that what they will do without having the basic necessity? Therefore, they started to pile them up at homes to avoid any problem in the future.
Well, this situation is justifiable for people who are in this fear. This is because the governments of many countries were not taking it seriously at the start. So, it was likely that everything will go wrong in the future, even more than their present situation.
Also, because more people were now staying at home. This means that they will be using more toilet paper than before. It is estimated that the rise would be as much as 40 percent more use than before. So, this is a great reason why demand rose and then the prices. Few people go to restaurants, hotels, and other café type places, so there is less use of toilet paper.
People usually do not have an idea that how their purchases are impacting the whole economy. It changes suddenly as the demand from the consumer’s changes. It could on either side of the scale. If for instance, the demand for toilet papers drops today. Then the price will also drop because production will lower down.
There will be a sharp drop with a sharp fall in the use of this product. This is how the upper trend works as well. Panicking in such situations can ruin the economy, so we should try to stay calm and act wisely.
High Demand Vs Supply
One more reason behind it is the shift in supply and demand. As we are continuously discussing that this change will increase the price. So, it was automatically the result of a huge change in supply and demand. This is mainly because the governments of different countries control prices. However, this control does not allow the price to completely adjust to the upward trend.
The concept of supply and demand in economics is explaining this shift very well. The problem is that very few people know about the main or the central idea of it. That is why they are panicking and getting crazy that why the prices are increasing so much.
Just like it is for all other goods and products, the same case repeats with the toilet papers. Their demand is increasing the marginal cost which is a sure result of this situation. Producing more toilet papers within the same system requires more workers. If you do not hire them, the marginal productivity of previous ones will decrease.
Also, working will a lesser number of labor lower their productivity. As a result of this, the marginal cost starts to increase till it reaches the highest value. This is especially true in the case of toilet papers as their demand keeps on increasing, hence the price also increases.
We are sure that the above information is of great help to you. Especially if you want to under that why is toilet paper so expensive overnight.
The demand for quantity exceeds normal expectations, so the producers have to manufacture more of them. For this purpose, they have to apply more effort, money, time, and effort. All of this when combined causes a rise in the price range of a product that was once inexpensive.
It is a simple concept which is normally not understandable for a layman person. This informative article would help such people a lot by removing all doubts about expensive toilet papers.