Understanding Supply and Demand in UK Food Crisis

ECONOMICS FOR
BUSINESS

EXECUTIVE SUMMARY
COVID-19 have came as the biggest crisis of 21st century. The pandemic that posed
health risks to the population around the world, not came alone as a health disaster but
interrupted all sorts of activities like economic, travel, administrative, social or altruistic,
educational and all. Therefore, it have not came alone and affected health in solidarity, but
affected financial health of people as well. Since the Coronavirus was one which seemed to have
been spreading through physical touch and close contacts among people as well. The most
accurate measure though by governments across the world was to Lockdown. Lockdown is a tool
that means noting but shutdown and temporary closure of economic activities and movement of
people. Also under this tool borders are closed in different levels, such as in locality, city
districts states and even at national level. This is to avoid any entry of infectious person from
outside to the area. This measure of lockdown was also adopted by UK government, for similar
purpose. The motive of government was nothing but to contain spread of virus. But what was
seen is different in the country. The virus spread was though could not get controlled whereas
financial crisis together with food crisis had caught people badly an d made them fall under a
very vicious trap, that not only affected their health adversely but grappled their lifestyle.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Understanding Supply............................................................................................................5
Understanding Demand..........................................................................................................8
Understanding Equilibrium..................................................................................................12
Understanding Shortages and Surplus..................................................................................12
TASK 2..........................................................................................................................................13
Economic Principles of Market Failure................................................................................13
Interventions of Government................................................................................................13
Disagreeing with Government interventions........................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
Books and Journals...............................................................................................................16

INTRODUCTION
Food crisis is one of the worst situations that is faced by people in society, where the
basic necessity of life do not lie in the affordability range of people. Their social troubles
increases and leads to many other problems as well, like enriching socio-economic disparity.
One such crisis was faced by United Kingdom in year 2020, which is attributable to many
reasons (Clapp and Moseley, 2020).
In this report, an analysis of food crisis occurred in UK as result of multiple factors, that
led to the crisis. The analysis in the report is divided into two parts, TASK 1 and TASK 2. In the
TASK 1, report has made understanding of the food crisis with the help of Economic concepts of
market forces of Demand and Supply and has also attempted to understand positioning of Market
Equilibrium. This supports the discussion in gaining knowledge from basics. In TASK 2, report
have discussed initiatives taken by the government and their value in solving UK food crisis
have been evaluated.
TASK 1
The problem of food crisis emerged in the United Kingdom was result of multiple
factors. First of all the crisis emerged as the situation bought by controlling measure of
Lockdown. Even though food production in the country continued but the suply was disrupted in
such a way that shortages were seen in market. One other solution that could have helped was
outsourcing of food and meat products from other countries but the lockdown have made borders
closed from side of UK Government as well as from side of other countries. Brexit decision of
UK government, loosened faith of international markets in the country and imports of food and
meat products declined from there as well. However this was the initial problem where there
were supply disruptions and stress over existing stock of food grains. The time when this stress
as turned into crisis is the real issue. The crisis was mainly emerged due to prolonging of
lockdown (Lin, Lloyd and McCorriston, 2020). Also suppliers in market were latter seen
becoming reluctant to release existing stock of food products and started hoarding the stock.
They were doing so because of fearing future supply of food products. Hence this resulted in
scarcity of food products. Now where earlier borders were closed from both sides, some of the
countries became more reluctant to exchange trade with UK, when new strain of virus was
detected from country.