Course: Managerial Economics

Submitted to:
Dr. Muhammad Shariat Ullah
Professor and Director, MBA (Evening) Program
Department of Organization Strategy & Leadership

Submitted by:
Naimatul Jannat
ID: 91804018
4th Batch
1.

The global crisis of COVID-19 pandemic had increased anxiety among the people and increased
panic buying behavior across the world. COVID-19 created fear, panic and uncertainty among
the people. Panic purchasing is a type of behavior marked by a rapid increase in purchase
volume. Panic buying may result from a number of different events. Generally panicked buying
occurs from increased demand which causes an increase in price. Conceptually panic buying and
selling on a large scale can have dramatic affects leading to market shifts in various scenarios.

Panicked purchase is not change in demand. The change means an increase or decrease in the
volume of demand and supply from its equilibrium. There exist some determinants other than the
price of the commodity which affects the quantity of demand, like the income of consumers, the taste
of consumers, preference of consumers, population, technology, etc. When these determinants
changes the demand of product change. But in shift in demand, consumers demand increase even
though the price hasn't changed.

Panicked purchase is shift in demand. A shift in the demand curve is the unusual circumstance
when price remains the same but at least one of the other five determinants change.

Those determinants are:

1. Income of the buyers.

2. Consumer trends and tastes.
3. Expectations of future price, supply, needs, etc.
4. The price of related goods.
5. The number of potential buyers.

Factors that cause a demand curve to shift

When the demand curve shifts, it changes the amount purchased at every price point. For
example, when incomes rise, people can buy more of everything they want. In the short-term, the
price will remain the same and the quantity sold will increase. Panicked purchase caused demand
curve to shift. Pandemic has created fear, anxiety and uncertainty in people. Such anxiety is
associated with uncertainty about the future and that’s why people are making panicked
purchase.
2.

The worldwide spread of the novel coronavirus is leading to some side effects such as

panicked buying. Panicked buying is a neo-normal topic in present pandemic around the world

and most of the countries are facing this problem.

Major items of panicked purchase in Bangladesh:

The major goods that were panic bought were necessary products for daily need such as rice, oil,

egg, fish and meat, salt, spices, and safety products such as hand sanitizer and masks. Some people

were bought medicine like azithromycin, ivermectin, paracetamol, montelukast, doxofylline,

salbutamol, fexofenadine, and some vitamin tablets.

Major items of panicked purchase in India:

According to a survey by Rakuten Insight on panic buying after the coronavirus outbreak, 61
percent of Indian respondents stated that they had not engaged in panic buying because of the
coronavirus pandemic. In the same survey, the majority of respondents who did engage in panic
buying indicated that they stocked up on dry food items such as rice, noodles, pasta and flour.

Major items of panicked purchase in USA:

In USA major buying items were toilet paper, face masks, paper towels, cleaning wipes, gloves
and Spam canned meat, disinfecting product etc.

Major items of panicked purchase in United Kingdom:

In UK major buying items were mainly hand sanitizer, face mask, hygiene products, food and
medicine specially cough and cold remedies, vitamins etc.

Major items of panicked purchase in Italy:

In Italy major buying items were mainly pasta as well as other food, medicine and hygiene products
like toilet paper, hand sanitizer, face masks, disinfecting product etc.

Major items of panicked purchase in Iran:

There were high demand for mask, sanitizer, hygiene products in Iran but there were no noticeable
panicked buying.

Factors influence panicked buying decisions:

There are some reasons like uncertainty, fear, mistrust to Government, rumors triggers people to
panic buying. Some countries like Iran, USA, UK, people are being more sensible and stopped
panicked buying some are not.