Business Economics: Determinants of Demand, Panic Purchase Phenomenon, and Cost Analysis

Business Economics

Contents
QUESTION 1.................................................................................................................................................3
Determinants of demand would be influenced.......................................................................................3
QUESTION 2.................................................................................................................................................3
(a) Observation of the phenomenon of panic purchase, in particular, describe how the prices of the
relevant items changed from the start of the pandemic.........................................................................3
(b) Use a demand and supply model to illustrate the increase of the price of the sanitary items..........4
(c) Return of the price to the normal level when the pandemic was under control and explain the
causes leading the return of the price to the normal level......................................................................4
QUESTION 3.................................................................................................................................................5
REFERENCES................................................................................................................................................6

QUESTION 1
Determinants of demand would be influenced
(a) Political and trade tension between Australia and China: Unless a rapid resolution is found,
Chinese tariffs are found to have an effect on Australia's wine profit margin in China in the near-
to medium-term. Several Asian nations with less developed wine markets and growing wealthy
elite should be actively considered by Australian winemakers and marketers as potential
development prospects. China's import tariffs will raise the cost of Australian wine in China.
According to a 100 percent tax, the price of wine in China has skyrocketed.
(b) Income in China grows rapidly: Australia is China's 6th biggest trade partner, serving as the
country's fifth-largest importer and tenth-largest export client. China accounts for 25% of
Australia's manufactured imports, while thermal coal accounts for 13% of its exports to China. In
addition, a two-way investment connection is forming. As predicted, growth slowed from the
preceding quarter's blistering 18.3 percent, which was accentuated by contrast to early 2020,
when the nation's fastest economy shut down industries, shops, and workplaces to combat the
viral disease.
(c) The price of French wine becomes less expensive: The price of wine is influenced by a
number of factors, including the wine's history, geographical origins, acknowledged
characteristics, and competitive pressures. It's obvious that one of the most significant factors in
deciding the sales price of wine is the amount of wine produced. Each grape harvest comes with
its own set of charges.
QUESTION 2
(a) Observation of the phenomenon of panic purchase, in particular, describe how the prices of
the relevant items changed from the start of the pandemic
People began panic buying during the COVID-19 epidemic because they worried the
economy would collapse and they would be unable to acquire basic necessities. As a
consequence, people began purchasing Sanitary products. Sanitary protection saw an increase in
demand in 2020 comparison to the prior year, owing to buying up mostly during beginning
phases of the pandemic whenever the government declared a lockdown in March, when several
women bought massive volumes of such goods due to fears of stock outs in retail locations.