In this uncertain and shaky economy, knowing the laws of economics
101 - supply and demand, will help you buy better food products
at better money saving prices. This article will explain not only
what the rules of economics 101 are, but how they can benefit
you starting today.
Demand Economics
As demand goes up, prices go up, and as demand goes down prices
go down.
Have you ever noticed a new product that starts out at a fair
price, and yet when the product becomes popular, the price goes
up? This is due to the law of demand in economics.
For example, my husband and I love a certain type of frozen
pizza at a grocery store where we live. It is an off brand product
but made by the same large name companies. The price is a low
$1.99 per pizza. After a few weeks, we noticed the store began
to carry more of these pizzas in a more visible location in the
store. We know it is only a matter of time until we see an increase
in price. That is how demand and pricing works.
Supply Economics
When supply is too high, prices goes down and when supply is
too low prices go up.
Orange juice is a recent example. Due to the winter storms in
Florida the orange crops were expected to be down, thus causing
the suppliers to increase the price. Businesses that sell products,
have to make sure they stay in business, and if they have less
items to sell then they have to figure out how much to increase
the retail price in order to bring in enough money to sustain
the business operations. That is how supply and pricing works.
If you can understand those two principles, you will begin to
understand why prices often fluctuate in the stores for the products
we buy. They can help you make better purchasing decisions.
Let me give you a perfect example below from even just today
while grocery shopping.
The Rules of Economics Helped Me Save Money
I cook a lot of pasta
recipes, therefore I buy a lot of pasta. Pasta can get expensive,
unless you always buy the inexpensive brands around 69 cents a
pound. But, I also appreciate the taste of really good pasta which
is often lost in the lower cost brands. The best pastas are typically
those imported directly from Italy and cost 50 cents to a dollar
more per box. For a heavy pasta eater on a budget however, it
can add up pretty quick. Therefore I only purchase them when on
sale or not at all.
However, I always hold out hope and never stop looking for the
deals. A few weeks ago I was in the pasta aisle and as usual went
to see if there were any mark downs on the high end brands of
pasta. I didn't see any, but did see a new brand which was imported
directly from Italy. My thought was, "I guess they think
they can sell it high end at a high end price." I passed
on it and decided to give it some time to see if they would lower
the price later.
Today while at the store, I again went to check out to see if
any of the high end brands were marked down. Lo and behold, the
new brand was on sale for the same price as the standard boxes
on sale - 10 for 10. I snatched up a box or two from each kind
they offered. Supply and demand.
What Just Happened
Here is what most likely happened. Demand was expected to be
higher with this new product. If the demand had been higher, the
product would not have to be put on "sale". Demand was
therefore lower than expected causing an oversupply of product.
The supplier needed to move the product, and instead of permanently
lowering the price, which would take it out of the "high
end" category, they put on an impressive sale thus causing
the products to be sold quickly. This helps them clear up the
backlog of inventory.
Once the sales are made and inventory is where it needs to be
without creating a shortage of supply, the sale is taken off and
prices return to normal. Simple economics 101.
Practice these Rules
You can take advantage of these rules by applying them every
time you shop for food. Follow these three guidelines:
- Always monitor the prices of foods you typically buy. Even
when it is not on your list, keep an eye out so you can recognize
the pricing game and know when you see a good deal.
- Buy extra when items are on sale. There is one kind of pasta
I buy that once a year goes on sale for less than a dollar.
I always look for this sale. When I see it, I jump on it and
store the extra of what I bought. If you are able to do this,
you will save money in the long run. This applies to more than
just pasta however. Meat is a perfect example. Those who own
manual or electric
meat grinders, meat
or food slicers, or similar appliances know exactly what
I'm talking about. Being able to buy meat in bulk and then grind
or slice your meats when you need them is extremely more cost
effective and you will beat paying retail price each and every
time you use those appliances.
- Always look at the better brands to monitor their prices.
Never assume all high end products are never on sale. The laws
of economics apply to everything that is sold, no matter who
makes the product!
I've applied these rules many times over the years. The more
you think economics the better you will get. I have made some
amazing Italian
recipes that one would think I spent a fortune on the ingredients.
But not so, instead I learn to recognize and take advantage of
deals when I see them - and so can you.
Take for example, my
chicken cacciatore or chicken picatta recipe. Or even my eggplant
and zucchini with pasta recipe. Serve your meal in some beautiful
Italian
pasta bowls or plates for a nice presentation.
Happy food shopping!
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