In the News
Shifts in Demand and Supply - Fish and Chip Shops Facing Closure
Here's an interesting article from the BBC about the difficulties facing fish and chip shops in the UK caused by shifting demand and supply conditions.
The article identifies how the industry (like many others) is facing large increases in energy costs but has seen a particular impact caused by its heavy use of sunflower oil. Imports of the cooking oil have been reduced and prices increased as a result of the continuing war in Ukraine. The cost of living crisis also impacts on demand where households are limiting consumption of takeaways.
According to commentators within the piece, the conditions are worse than during the pandemic for fish and chip shops.
For teachers, there's a opprtunity to use the article for some application with demand and supply theory as it is introduced over the coming weeks (or as a bit of revision for year 13s). Students could draw shifting demand and supply curves to show changing conditions in the market. What is the level of price elasticity of both demand and supply for chips and how has that impacted on the market?
Owners of the shops are asking for government support during this dificult period. From a macro and micro point of view, what might be the advantages and disadvantages of government intervention in the market if they were to reduce VAT on fuel or provide subsidies to the market?