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

Eggs are used in a lot of food products. If the price of eggs suddenly climbs, other producers using eggs faced increased costs.

Some consumers may also shift their buying habits to other goods instead, driving demand up there.