Question

How has demand been effected during the times in COVID 19, why have things changed?

Answer 1

The COVID-19 outbreak is a global humanitarian crisis that has affected millions of people. The economic impact of the pandemic can be seen across sectors, but it may be most widely visible in the consumer goods sector. News broadcasts and social media feeds are flooded with images of empty shelves that should house toilet papers and cleaning supplies. Consumers are shifting where they shop, what they purchase and how much they purchase at an unprecedented scale and speed.The COVID-19 crisis is expected to severely impact the overall consumption trend and consumer spending. Following the COVID-19 outbreak and subsequent lockdown, all segments have faced the burnt, albeit with varying magnitudes.

International businesses are disrupted, supply chains are affected, there is drastic fall in production ofluxurious items. Due to the fall in output, workers are laid off and left unemployed, which further has severely impacted the disposable income of the consumers and ultimately affecting the aggregate demand.

When we look into the aggregate demand of essential items, consumers are indulging in "panic buying" sitting at their homes, quarantining.

So we may conclude that overall the aggregate demand is much affected during this pandemic, basically changing the pattern of consumption of consumers, shifting them from buying luxurious items to hoarding essential commodities.