economics assignment 2 project

Search for Cheap Ice Cream

Julie Whatley and Grayson Parker

Our first stop to find ice cream was this little gas station in the middle of

nowhere…

This is their supply of ice cream… (Very Limited)

Their choices are… BUT Breyer’s Ice Cream: $3.19

Supply and Demand ChangeAt a small gas station, supply and demand both decrease. We also see that the ice cream prices decrease, because there is less supply and less demand. So, we left to find a bigger gas station that we hoped would have a better selection.

Ice Cream Graph

We thought QuikTrip would be the ticket!

Unfortunately, they were under construction… so this was their supply.

We found a very expensive Haagen-Dazs ice cream and a

very cheap Edys.

Haagen-Dazs Ice Cream:

$4.49

Edy’s Ice Cream:

$1.99

Since they are under construction, QuikTrip’s supply has decreased

substantially, but it turns out there isn’t much of a demand either.

We decided these prices were relatively cheap and

reasonable compared to the other places we visited.

Therefore, we decided as the supply and demand of ice cream both decreased, the

price of the Haagen Dazs and the Edy’s went down a little.

The shift in demand outweighed the shift in supply because there is little demand for ice cream at QuikTrip and

more demand for gas and drinks, although they were

under construction.

Next stop… CVS Pharmacy!

We discovered a variety of our favorite ice cream, but at very

expensive prices!

Edys: $5.79

Ben & Jerry’s: $5.49

Haagen-Dazs: $5.49

We began to wonder why they had such steep

prices… The supply is very

limited, however we believed a high demand

for ice cream at pharmacy stores drove

the prices up.

The increase in demand would cause the prices to go up, as well as the

need for a larger supply.

We hoped Walmart would be a little

cheaper…

Walmart had the biggest ice cream supply I’ve ever

seen!

The increase of supply at Walmart makes them able to drive their prices down. Which is why Grayson and I got a very good price on some Ben & Jerry’s!

Large Supply= Lower Prices

Breyer’s Ice Cream: $2.97

Edy’s Ice Cream: $3.24

They also had a great selection of flavors of Ben

& Jerry’s!

Ben & Jerry’s: $3.98

Haagen-Dazs: $3.98

Next at Kroger, we wanted to see how grocery store prices came against Walmart

There was also a large selection of ice cream at

Kroger

Ben & Jerry’s: $4.89

Haagen-Dazs: $4.49

Edy’s: $5.99

Breyers: $4.99

However, even though they had a large supply, it seemed that Kroger still had higher prices than Walmart. We came to the conclusion that even though both stores had large supplies, Kroger has more of a demand (by being a grocery store) and was able to increase price from the increase in demand.

Great selection of ice cream, but not cheaper

than Walmart.

The demand shift is larger than the supply shift that causes Kroger to be able to drive their prices up higher

than Walmart. Therefore, Kroger’s supply and price both increase.

Lastly, BJ’s delivers their products in bulk, which enables them to reduce their prices for a

larger amount of product.

The ice cream section of BJ’s is very limited in choices, but they offer more “bang for your buck” with large quantities of ice cream for less money.

Ice Cream Prices

Haagen-Dazs (28 Fl Oz): $5.29

This is 2x the Haagen-Dazs for about the same price the other stores had to

14 Fl Oz!

Breyers: $3.99

Ben & Jerry’s: $5.99 for one quart!

All the other prices of Ben & Jerry’s were for a pint!

BJ’s Shift in Supply

BJ’s is able to use their increase in supply to decrease the price for selling more goods at once.

This is an excellent strategy in order to sell more goods.

Comparing Haagen-Dazs Supply and

DemandPrice

Gas Station: N/A

Quik Trip: $4.49 (14 Fl Oz)

CVS: $5.49 (14 Fl Oz)

Walmart: $3.98 (14 Fl Oz)

Kroger: $4.49 (14 Fl Oz)

BJ’s: $5.29 (28 Fl Oz)

Supply

Gas Station: No Supply

Quik Trip: Little Supply, but Little Demand

CVS: Little Supply, High Demand= Higher Price

Walmart: Large Supply= Lower Price

Kroger: Large Supply, Large Demand= Lower Price

BJ’s: Buying in Bulk= Lower Price for More Ice Cream

Conclusion

By using the supply and demand charts, Grayson and I were able to figure out why the different stores had different prices for the same ice cream and that was all through Supply and Demand.

We were also happy to spend a whole day looking at ice cream! And we got our Ben & Jerry’s!