So just to be clear, this is not going to be an in-depth supply side economic treaty nor how to calculate equilibrium during a move in the supply/demand curve. Instead this is more about noticing the beginning, middle, and signs of the end of the first panic induced shortage of toilet paper I have ever seen. Crazy.

So some really basic things here. Price for a item is based on the equilibrium of supply and demand. Cool. Supply is replenished to maintain pace with demand. Also cool. However, we demand suddenly outstrips supply, we get limited supply. Not so cool, but as long as that demand is sustained, supply will catch up eventually. Now here is the fun part, sometimes people just go nuts and create inflated short term demand. Add in some crappy people who exploit this by buying what limited stock there is to make a profit, (price gouging) and everything become that much worse give us shortages like the large number of images of empty racks. And so it is today with toilet paper.

I guess we are well into the second week when I first started noticing bins not being quite a full in my local shops. Mostly frozen food, beans, rice, and pasta…. and toilet paper. The funny thing is, I can always find any of the above listed items if I look around enough, but TP, no where! So from a supply side point of view, what is going on?

Basically demand is simply being artificially pushed forward. Demand is not really up, in the sense that people are really using all this paper. (As far as I know), but instead people are buying and hording, and others are gauging, causing a panic which just feeds on itself. (By the way, you people suck). But somewhere, is garages all over the US, are stocks and stocks of TP. Now if people were REALLY worried about cleaning after using the bathroom, they should get a bidet. Works great, used all over the world. Had one for a few years, Installed it myself in less then an hour. But that will be another post.

Now add to this panic hand sanitizer, wipes masks, etc.. all of which are harder to increase supply and now we have a public health problem on our hands.

But I have noticed something change just today, which is why I wanted to write this. Some things are coming back. Not all, but those that were closer in the supply line are on the shelves and staying on the shelves. I’ve also noticed today, not many people were shopping and most people where getting just a few things. Last week it seemed every other shopper has a overfull cart. Whats going on? I think the panic may be at peak. Stores are starting to limit the number of items people can buy, those that are gouging are getting called out, some getting their online selling accounts closed.

So that got me thinking, what happens when those induced to panic, have enough? Supply will just as suddenly outstrip demand. I mean, buy 100 roles of TP, I do not think you are going to be buying anymore for awhile. Same with frozen pizza, masks, pasta, and all the other stuff that people have been grabbing. I think we may see some REALLY good sales soon.

  • update: I wrote this on Sunday, and its now Wednesday in the bay area. We are on lock-down (shelter in place) I went to Costco earlier today to get something and it was pretty empty, lots of stock. I think we are already starting to see the end of the panic. 🙂

BTW, check this video below. There are LOTS of places like this all over the place. Don’t worry, we have TP.

level 7Hahnsolo11347 points·1 hour ago

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