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?
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It will depend on a lot of different factors. Sticking with the example of eggs, eggs and egg by-products (ie. dehydrated/powdered eggs) are used in a *lot* of the food we eat in the west. Everything from muffins, cakes, and bread to the breading on your chicken fingers can have eggs in them.
And let’s not forget one of the most ubiquitous condiments in the world: mayonnaise. Traditionally, mayonnaise is made by beating eggs and then adding oil in a steady stream while continuing to mix until it forms mayonnaise.
Now we’ve got not only mayonnaise, but everything that mayonnaise is in, which is a lot. An awful lot. And now all of those things are influenced by the price of eggs though realistically, a spike in the price of eggs isn’t likely to cause a spillover effect to other products. The issues we’re having now aren’t that one product has gone up in price and everything has gone sideways. The issue is that a lot of products have gone up and the people who had the most to gain from riding the inflation wave to record profits are the ones setting the prices of what you buy at the grocery store.
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