Posts Tagged ‘control inflation’

Got this nice piece of writing and thought it would be nice to share here at this point of time where we are bombarded with price hike everywhere.

Its just a Logic – and It May Work!!

A man eats two eggs each morning for breakfast.  When he goes to the Kirana store he pays Rs. 12 a dozen.  Since a dozen eggs won’t last a week he normally buys two dozens at a time. One day while buying eggs he notices that the price has risen to Rs. 16. The next time he buys groceries, eggs are Rs. 22 a dozen.

When asked to explain the price of eggs the store owner says, “The price has gone up and I have to raise my price accordingly”.

This store buys 100 dozen eggs a day.  He checked around for a better price and all the distributors have raised their prices. The distributors have begun to buy from the huge egg farms.  The small egg farms have been driven out of business.  The huge egg farms sell 100,000 dozen eggs a day to distributors.  With no competition, they can set the price as they see fit. The distributors then have to raise their prices to the grocery stores. And on and on and on.

As the man kept buying eggs the price kept going up. He saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there.   He checked out the huge egg farms and found they were selling 100,000 dozen eggs to the distributors daily. Nothing had changed but the price of eggs.

Then week before Diwali the price of eggs shot up to Rs. 40 a dozen. Again  he asked the grocery owner why and was told, “Cakes and baking for the holiday”.  The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.

This pattern continues until the price of eggs is Rs. 60 a dozen. The man says, ” There must be something we can do about the price of eggs”.

He starts talking to all the people in his town and they decide to stop buying  eggs. This didn’t work because everyone needed eggs.

Finally, the man suggested only buying what you need.  He ate 2 eggs a day. On the way home from work he would stop at the grocery and buy two eggs. Everyone in town started buying 2 or 3 eggs a day.

The grocery store owner began complaining that he had too many eggs in his cooler.  He told the distributor that he didn’t need any eggs.

Maybe wouldn’t need any all week.

The distributor had eggs piling up at his warehouse.  He told the huge egg farms that he didn’t have any room for eggs would not need any for at least two weeks.

(more…)

Advertisements