Increase in Price
In his brief news article in The Wall Street Journal, Page (2022) summarizes recent changes to the demand for freight shipping services in the U.S. The price of transportation services has grown drastically, resulting in increases in truck drivers’ wage levels in the U.S. In 2021, the job opportunities for professional truck drivers started to improve as the truck driver market experienced a lack of responsible and qualified drivers to proceed with transportation tasks (Page, 2022). Specifically, Walmart, Thomasville, and other large transportation companies or retailers owning large truck fleets have recently increased their expenses on truck drivers’ salaries and wages by almost 20% (Page, 2022). These wage-related decisions demonstrate an attempt to increase the supply of qualified employees to address the nation’s growing demand for goods that undergo long-distance moving. The described shortage in the equilibrium quantity of freight services illustrates Graph A and the shown process of price growth due to the lack of supply to meet the growing demand for transportation.
Decrease in Price
In a news article published by The New York Times, Weiland (2022) addresses the decreasing demand for Coronavirus tests to be used at home rather than in healthcare settings. Nevertheless, the supply of the product for self-testing remains sufficiently high as the manufacturers have not been able to predict U.S. citizens’ loss of interest in self-testing in March. The peak demand for affordable and convenient COVID-19 tests could be seen in January; the news about the novel Omicron variant of the virus created another wave of panic (Weiland, 2022). With high demand levels, the manufacturers of at-home tests could profit from selling them, but the situation became significantly different later. As of March, the supply of tests, which was over 460 million items produced per month, exceeded the gradually decreasing demand, causing a reduction in prices (Weiland, 2022). This excessive supply and the resulting changes to prices are illustrative of the process shown in Graph B.
References
Page, P. (2022). Truck-driver pay rose 11% amid strong freight demand last year. The Wall Street Journal.
Weiland, N. (2022). Biden offers more free COVID tests although demand has slowed.The New York Times.