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
Let’s say everyone buys 10 eggs a week.
Suddenly, for some reason, there is not enough eggs for everyone who used to buy those eggs.
Which means there will be less eggs to be sold. And also there will be people increasing the price of eggs, since there is an increase on the need of it.
Then, eggs that were used to manufacture other things, like bread, also are in short offer because the demand of eggs per se is increased and there will be ppl who sell eggs looking to profit more selling eggs to the public.
Now, ppl who couldn’t buy eggs, gonna buy other stuff, which wasn’t as used before. So it also gonna have an increase in demand, thus also increasing the price of it.
It’s a generic idea of how the stuff works.
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