Avo trend in reverse

April 16, 2020

In recent years avocados have been a widely used example when teaching how markets respond to increasing demand:

  • initially more competition drives prices higher

  • the supply increases as resources are re-allocated and growers produce more (perhaps existing growers of other fruits who pulled trees out and replace them with avocado trees).

Now the market is heading in reverse with a significant decrease in demand as cafes and restaurants have been closed due to the coronavirus pandemic. There has also been a decrease in exports with the same social distancing restrictions in most of the countries to which Australian avocado growers sell.

 

Read this ABC News article about the impact on the avocado market.

 

It’s a great example to discuss with your Year 8 students when looking at markets.

It’s also an opportunity to have Year 11 students use the demand and supply model to show the effects of both changes on the price and quantity sold.

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