Analytical Media Assessment (Economics)

Lucinda Jose written an article related to fresh produce prices to stay high for months, says major
producer slashing crops due to lack of workers at 28 Jun 2021.There are three main point of this
article first is A major producer predict that the prices of fresh vegetable are rising for a few
months. Second is the Western Australia and South Australia producer said that the cultivation of
cucumber have been nearly halved and third is producer says that there are shortage of worker
for plantation, tend and harvest the cucumber crops. Labor shortage theory is used in this article.
There are following determinant of labor shortage, Demand growth, supply contraction, and
government intervention. Labor markets are like goods markets having demand and supply
curves (Chin and Hamori, 2009). Demand applies in labour markets as follows: A higher salary
or wage reduces the quantity of labour demanded by employers, while a lower salary or wage
increases the quantity demanded. So does supply law in labour markets: A higher labour price
leads to more labour supply; a lower price leads to less labour supply. The shortage of labor
caused a forced hiring of unqualified candidates, lost production opportunities, and reduced
business investment and product development (Jia-chang, 2004). The economic principal of
scarcity is used in this article. Scarcity is a main economic problem in which resources are
limited and scarce (Mullainathan and Shafir, 2013). In this article labor sources are short for the
cultivation of cucumber. Due to scarcity, demand increase and the prices of the cucumber remain
high for few month and create the below situation.
Explanation: In this diagram, the demand of the cucumber production increase from D1 to
D2.Supply curve remain the same and price increase from P1 to P2. Under shortage as the supply
of cucumbers are in shortage but still in high demand but meaning price must rise to meet the
equilibrium. Cucumbers being elastic as they have substitutes such as zucchini’s, and price has a
strong effect of cucumbers demand.

I think the writer very clearly explain the economic principal through application in this article
she says that cucumber demand increases and its supply decrease and prices are high. Mr.Songer
says that the producer remain the old supply – demand curve which clearly explain the economic
theory through the application of the production of cucumber in which lack the supply of labor
explain the economic problem of scarcity. The other thing which explain clearly that the
cucumber demand is elastic because it has substitute. Economic theory is also explain when a
goods has more substitute its demand is elastic (Garbou and Monmarquette, 2011).

Finally concluded that this article explain the prices of fresh vegetables, cultivation of cucumber
and the shortage of worker for the plantation, tends and harvest of cucumber. This article clearly
explain the economic principal and its application through economic problem scarcity and the
substitute of the goods. The production of cucumber harvest increases in future if the labor
wages will be high. The higher wages increased the supply of labor through substitution effects.
The equilibrium price falls as labour supply increases and rises as labour demand increases.
Reference:

Chen, G. and Hamori, S., 2009. Solution to the dilemma of the migrant labor shortage and the
rural labor surplus in China. China & World Economy, 17(4), pp.53-71.

Jia-cheng, L.I.U., 2014. Analysis of “Labor Shortage” and “Employment Difficulty” in the View
of Cost-benefit Theory. Journal of Zhejiang Wanli University.

Lévy-Garboua, L. and Montmarquette, C., 2011. Demand. In A Handbook of Cultural

Economics, Second Edition. Edward Elgar Publishing.

Mullainathan, S. and Shafir, E., 2013. Scarcity. Social Policy, 46(2), pp.231-249.