Intro to Business Essay

Words: 1055
Pages: 5

No one can predict a natural disaster or world crisis. When a hurricane or flood or a pandemic strikes a country, who is most likely to respond first? Which economic system is the best solution for handling a crisis of epic proportion?
When a natural disaster occurs the local people are typically the first to respond. This could be local citizens, fire departments, police, or anyone who is in the immediate area and also the local government. They help to search for living people and try to rescue and aid as many victims as possible. National non-profit organizations like the Red Cross and other Non Government Organizations (NGO’s) are normally on the scene relatively quickly to try to ease the suffering and aid in the humanitarian causes
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3. When disasters hit an area, the cost of everything--food, water, housing, gas and so forth--seems to go up immediately. Explain why this phenomenon may be a good thing, using the laws of supply and demand to explain your answer.
In order to explain how this phenomenon may be a good thing by using the laws of supply and demand; we first need to understand the definitions of supply and demand. Nickels et al. (2010) states that “supply is defined as the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time. Demand is defined as the quantity of products that individuals are willing to buy at different prices at a specific time (page 37).” According to Economics Basics: Demand and Supply (n.d) The law of supply and demand states that as prices increase supplies increase and demand decreases. Therefore, when prices decrease supplies decrease and demand increases. Through the concept of supply and demand, when the price goes up there would be more production of an item because of the profit involved. (paragraphs 3-5) There would also be a decrease in demand because people would only buy what they need. This is especially important after a crisis. It helps to eliminate people over purchasing supplies and hoarding items. When people have a run on items it does not allow for everyone to get the items they need for their own survival and comfort. People are less reluctant to over purchase if they