Some businesses have been reacting to the coronavirus situation in a manner you would not have expected. When supply or demand of a certain sector goes down, you expect certain patterns. However, during this pandemic, a few things have happened in a very unconventional manner. Dr. Israel Figa has talked about the twisted impact of the pandemic on various businesses and sectors. He has further explained why this effect has taken place and what people can expect in the future.
The words coming from an expert are always of importance, hence you should continue to read to see what’s happening to certain industries and why.
Industries Experiencing Unexpected Situations
According to Israel Figa, when the demand of a certain product or commodity goes, you expect that industry or sector to respond by reducing the price. In a similar manner, when the demand goes up, you expect the prices of that service/product to go up with time. However, certain industries have been reacting completely differently to the current pandemic situation. How? Let’s find out what Israel Figa has to say.
· The Petroleum Industry
The world has come to a halt in a way. You have people locked down in their homes and the markets have completely closed. The biggest nations of the world are experiencing the worst of the recent pandemic. Any governments that had thought they were prepared for a pandemic have been proven completely wrong. Now, you have the planed waiting in under the sheds, hotels waiting for their rooms to be occupied, and holy places awaiting their visitors. None of that is happening like it was just a couple of years ago. The people are supposed to work from home, which has brought down commute to a great extent.
This has resulted in a very low consumption of oil and other fueling energies. Does this mean the prices of the petroleum products will go down? Well, that’s not the case at all. People who work regular jobs are worried about their future. They want to use their saved money for anything but fuel. Furthermore, the situation is not dark for the petroleum industry. In fact, the situation is uncertain. Uncertainty means that petroleum industry does not know when things might come back to normal, so they are not completely inclined to reducing the prices of their products. As a result, the prices are not going down the way they should or even if they are, they will go back up pretty fast.
· The Restaurant Industry
Since people are supposed to practice social distancing, they are not going to restaurants for any dine-in experiences anymore. At the same time, you have people in homes who think they can prepare anything at home. They don’t want to spend money on expensive food. This means the restaurant industry should respond by reducing the prices of their foods, but that has not happened. Instead, the restaurants have actually increased the prices of their foods.
Firstly, they know many restaurants are shutting down, so the competition is actually getting easier. Secondly, they know people now have to resort to ordering online, which means added costs of delivery. Imports have completely stopped in many countries, which means exotic ingredients aren’t there anymore or are available at very high prices. As a result of these factors, the prices of the restaurant menus have gone up in recent times rather than going down.
There are many other industries, according to Israel Figa, that have responded to the current situation in a similar manner. According to Israel Figa, the reduced demand can only cause the prices to go down when the supply is abundant. However, in the current pandemic conditions, supply and demand are both low, with an uncertain future. This has resulted in scenarios that are completely new and unique, causing businesses to increase the prices of their products despite the fact that they were supposed to do the opposite by their customers.