eli5: Why does shortage of a product produce high inflation across the board?

Question

I don’t understand why shortage of product causes inflation across the board. For example, eggs are hard to get, but everything goes up in price due to the shortage. I can understand that low supply of eggs will cause the price of eggs to go up, by why does it affect all the other prices of food too?

In: 1

Answer 1

Supply and demand. Low supply of a good with high demand means the price goes up.

Remember, inflation is just the measurement of how much prices have increased (on average). It is not the direct cause of the increased prices.