Answer to Question #233453 in Management for Genine Kriegler

Question

The fear of nationwide lockdowns due to the current pandemic has pushed many consumers into “panic buying”. Critically evaluate this statement and use demand and supply analysis to analyse the possible impact of panic buying on market prices.

Answer 1

Panic buying occurs when people desire to acquire a lot of things at once because they are afraid about price increases or supply shortages. The covid-19 pandemic, for example, instilled in people the dread of a nationwide lockdown. Panic buying can be triggered by a variety of factors. In most cases, panic buying arises as a result of increasing demand, which leads to a price increase. Panic buying on a huge scale can theoretically have dramatic impacts, causing market swings in a variety of conditions.

The two settings for broad market repercussions from panic buying are investment trading and a country's economic framework. Both of these landscapes can be useful for tracking supply, demand, and price inflation. Panic buying usually has a more direct and immediate impact on investment trading. Panic buying can affect a country's economic structure, although it will have a less immediate impact because it generates price fluctuations in products that are depleted over a longer period of time from supply backed by inventory.