Basic Economics Example

1. Let us first assume a downward sloping aggregate demand curve and upward sloping aggregate supply curve, as is the case of most products and services being sold in a capitalist economy; where the intersection of both curves shows the equilibrium price and quantity that balances the market.

2. If there is a sudden demand for any product, such as the current panic buying in ammunition; that event will essentially shift the aggregate demand curve to the right, resulting in a new equilibrium higher price that suppliers are willing to supply buyers, given their current production capacity.

3. Since suppliers know that this sudden demand shock for ammunition is panic based and not because of a permanent increase, at least not yet, of buyers that will continue to buy ammunition from now to the future; they will likely not make any additional production capacity improvements that would be necessary to permanently shift the aggregate supply curve right; which would bring prices and quantities of ammunition back to pre-crisis levels.

4. What does this means for the traditional 2nd Amendment shooters?  We are going to have to live with higher prices, until the panic buyers frenzy ends.  Once it does, the aggregate demand curve for ammunition will most likely slide back to its original pre-panic equilibrium position, resulting in the supply and prices we were familiar before the pandemic crisis.


Any questions?

I got a Wheeler FAT wrench at the store if u need to use it.