Demand and supply is a fundamental concept that defines economics and controls the behavior of the market and consumption of goods. The knowledge of the model is an important aspect of the success of trading in consumer goods. Supply describes the number of goods and services that a business is able to offer to its customers while demand accounts for the consumer goods and services that will be bought at a certain price. Therefore, the concept defines how demand and supply relate to one another and how this affects the movement of goods and services. For instance, when the prices of commodities fall sharply, the demand will rise, as the buyers will be willing to spend more money to obtain the product. On the other hand, if the supply of such goods reduces significantly, the prices will increase. Similarly, when the market is flooded by excess goods and services, the price will decline because of the plenty suppliers competing to get their share of the market and meet the demand. There are many determinants of demand and supply of a particular commodity. This paper addresses the possible cause of price fluctuation of avocado, with how the change affects demand and supply.
When I visited a grocery store in the previous week, I noticed a drastic rise in avocado prices. This calls for an analysis of how this silent fruit has become one of the ever increasing in price in the modern consumer list. This increase has been experienced on a global scale and thus the analysis is applicable to vast fronts. To begin with, avocado is a fruit that generates from an evergreen tree of the Laurel family. Its origin is Central America and southern Mexico with a distribution throughout tropical and subtropical regions (Ferdman, 2015). This fruit is fleshy with a robust supply of provitamin A, riboflavin, and niacin. Its nutritional value is high and contains fats, antioxidants, vitamins, and low sugar content. Its protein levels are considered higher than any other fresh fruit ( McMillan, 2017) . It can be used in a wide range of food products with many more coming up daily. The fruit also enjoys a presence in other non-food markets such as medicine and cosmetics.
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The price of avocado has been on a rising trajectory and now enjoys a presence in most dishes of consumers. One determinant that has led to this is customer taste and preference. All markets undergo shaping by individual and collective tastes and preferences ( De Pelsmaeker et al., 2017) , and this fruit is not exceptional. The influence of such patterns is partly due to culture and partly embedded by the availability of knowledge and information on a particular product or service. The popularity of avocado has been increasing in the past few years with consumers becoming more health conscious and preferring to eat healthily. Part of this change in preference is attributed to the significant rise in the percentage minority in the United States. The presence of Mexican restaurants in the country offers a sense of information supply and most people would like to try out more and more products that are made of avocado (Ferdman, 2015). Mexico is the world’s largest producer of the commodity imparted the knowledge of the tasteful fruit in the minds of the natives who did not consider the fruit as beneficial in the first place ( Gálvez, 2018) . This brings to the surface the effect of cultural and social factors on the drive for the demand for commodities. Mexican cuisine is in high demand from the US market as more people are attracted to the guacamole, which is one of the most popular Hispanic delights. The popularity is can be seen in the success of Chipotle, a fast-casual Mexican chain.
The preference and taste of avocados can also be attributed to the availability of information that it has health benefits. Extensive studies have been carried out on the creamy fruit and the result has made it one of the most nutritious fresh fruits ( McMillan, 2017) . Its consumption has been linked to healthier overall diets. Previously, several campaigns targeted the badness of fats and the society was advised not to take much of it. However, through a recent revelation that not all fats are dangerous, the fruit has received positive remarks. Medical centers admit that avocados have also ascertained that the fruit is laden with plenty of health benefits ( McMillan, 2017) , hence pushing up the demand. In a time when people are becoming conscious about what goes to their body, the commodity has become a darling to many hence driving the demand of the fruit to the ceiling.
Since it was introduced in the market as an “exotic” fruit in the 90’s, this fruit has risen to become one of the most highly demanded commodities in the global market. The rise in demand is also captured in the US market, as it is becoming one of the favorite fruits. The United States Department of Agriculture estimates that the importation of this commodity has more than tripled even though the local supply has stagnated. With the demand growing as the popularity soars, the price increase as with time. The preference and taste of the consumer is an important factor that has made the supply and demand curve to shift upwards De Pelsmaeker et al., 2017) .
From an economic perspective, the result of the shift of supply and demand curve upwards or to the right leads to the increase in both quantity and equilibrium price. Equilibrium price is known as the point (price) where the number of goods demanded and supplied is equal. In other words, there are no surpluses or shortages. Figure 1 shows that when the avocado fruit was introduced to the commercial market, there were not many consumers. Therefore, the equilibrium price stood at point 1. After the change in taste and preference, due to the cultural influence of the Mexican population and the availability of information on health benefits, the curve shifts right De Pelsmaeker et al., 2017) . This makes the quantity and the price to increase with the new equilibrium price moving to point 2.
Figure 1 Demand curve for avocado
In other words, the effect of this shift means that the prices of the commodity have risen, as well as the amount that is being consumed or is on the market. The global trend in avocado quantity is a clear indication and confirmation of the above statement. The introduction of Hass variety of the fruit has seen the average annual production increase.
The trend in taste and preference is not an isolated case in America only. The culture is deeply rooted in the entire world as China also finds its share on the consumption trend ( Xiong & Song, 2018) . The Chinese middle class is learning the many ways in which avocados can be consumed as they are trying to put the different delicacies. The effect of taste and preference makes the world’s most populous nation showing an interest in the healthy fruit as the young, affluent middle class seeing it as a trendy meal. The implication of this shift in taste and preference leads to an increase in the overall prices in different ways. To begin with, China is the country with the largest number of people. What this means is that it offers the largest market for products, if most of the population uses them ( Xiong & Song, 2018) . This implies that the customer base has expanded.
With Mexico being the largest producers, the country enters a new market and sells to the emerging clientele. Bearing in mind that the supply of the commodity has been steady, this means that the market is slightly undersupplied and thus pushing the prices up. In other words, the emergence of the Chinese market because of changing tastes and preference makes more countries competing for the demand of Mexican avocados ( Xiong & Song, 2018) . Although the US is also a producer of this fruit, the production does not meet the needs of the country’s population and thus more and more imports have to be shipped in from the neighboring production giant. Mexican Avocado accounts for about 80 percent of the total creamy fruits sold in the United States. When the supply remains steady in Mexico, Chile, and Peru, and the demand rises in China (which also eyes the Mexican avocado), prices in the US will be affected as the populations will not get enough of what they seek ( Xiong & Song, 2018) . The market in the Far East makes the products that would have been shipped to the US being moved to China. Any deduction of product in the existing market has an implication for the consumer. They have to pay more for the commodity due to the reduced relative supply.
In conclusion, many factors determine the supply and demand of products in the market. However, as far as avocado is concerned, the largest player in the change is the taste and preference of the consumer. Many people have adopted the product and it has become one of the most popular fresh fruits in the world. The trend towards consumption of avocados has been attributed to the cultural and social factors that shape preference as well as the availability of information on the benefits of the product. In the end, taste and preference push up demand and thus the prices increase, as seen in the case of the creamy fruit.
References
De Pelsmaeker, S., Schouteten, J. J., Lagast, S., Dewettinck, K., & Gellynck, X. (2017). Is taste the key driver for consumer preference? A conjoint analysis study. Food Quality and Preference , 62 , 323-331.
Ferdman, R. A. (2015). The rise of the avocado, America’s new favorite fruit. Wonkblog, The Washington Post. URL: the-sudden-rise-of-the-avocado-americas-new-favorite-fruit .
Gálvez, A. (2018). Eating NAFTA: Trade, Food Policies, and the Destruction of Mexico . Univ of California Press.
McMillan, J. (2017). Health: Fats can be your friends. LSJ: Law Society of NSW Journal , (39), 54.
Xiong, B., & Song, Y. (2018). Big Data and Dietary Trend: The Case of Avocado Imports in China. Journal of International Food & Agribusiness Marketing , 1-12.
