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Tag Archives: demand supply

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Our story begins in 1920 with some ice cream, some chocolate and a stick. A candy maker decided to coat the ice cream with the chocolate, insert the stick and freeze it. Patenting the stick idea, he created the first ice cream bar and called it a Good Humor Ice Cream Sucker.

Privately owned, then publicly owned, and finally purchased by a Unilever subsidiary, Good Humor is a part of a multinational family. Its sister firms include Ben & Jerry’s, Breyer’s, Popsicle, Hellman’s mayonnaise and Vaseline.

Being a part of a large family is not always ideal. Unilever has made some supply decisions that are creating Good Humor shortages for ice cream truck owners.

During most of this summer, Mr. Ding-A-Ling Ice Cream Inc, owner of more than 60 ice cream trucks, will not have the most popular Good Humor product, their Toasted Almond Bar. The reason? Not only is Unilever closing a Maryland Good Humor factory but also it needs inventory for an expanded ice cream selection–including super premium Magnum bars– in convenience stores. That means less for Mr. Ding-A-Ling and other neighborhood ice cream trucks.

So, if you live in the Northeast and your Mr. Ding-A-Ling Good Humor truck has no Toasted Almond Bars, and you can’t even get a Chocolate Eclair or Oreo ice cream as a substitute, the reasons relate to demand and supply, inventory decisions and international trade. Add to that the patent for the stick and the entrepreneur that created Good Humor 92 years ago, and we can say that ice cream is more than just a dessert.

Another ice cream fact: While there was no ice cream on a stick in 1920, there were ice cream cones.  That “eureka” moment occurred at the 1904 St. Louis World’s Fair when an ice cream vendor ran out of cups and a nearby waffle maker probably offered to help out.

This lighthearted article from WSJ about Good Humor’s Toasted Almond Bar shortages is a good way to learn about ice cream history and to form the economic connections. Also, here is some Good Humor history.

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Interesting how real life can imitate economics. You know how corn prices have been soaring? Well, farmers responded just like they read an econ textbook. They increased supply. One tradeoff?  A smaller soybean crop.

Here are the headlines. You can see the perspective from Iowa in the Des Moines Register.

Washington Post: “Farmers plant second-largest corn crop in nearly 7 decades, could ease food prices this year

Des Moines Register: “Corn Plunges on Shocking USDA Report

WSJ: “A Corn Crop Bonanza

The Economic Lesson

On a demand and supply graph, demand slopes downward and supply slopes upward while price is our y-axis and quantity, the x-axis. Because farmers expected higher prices for corn, they switched from soybeans and wheat. As a result, the corn crop is bigger while the soybean and wheat harvests will diminish. On our graph, price falls because the corn supply curve shifts to the right.

An Economic Question: How would you draw the demand and supply graph for soybeans?

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