Assignment no #1

PGDM 2018-20 (Section-C)

Submitted by:-Ashish Kumar Yadav

Sub-topic: Case Study on “Hurricane Sandy: Supply, Demand and Appropriate Responses to
the Gas Shortage.

Q.1:
a. “Is the case fundamentally an issue of supply or demand?” Discuss it.
Ans:- As far as this case is concerned, this case is fundamentally an issue of supply
because demand for goods( Gasoline) and other services were very high at the time of crisis
due to hurricane, so the actual problem was not of the rising demand. The natural disaster
called hurricane sandy created a lot of chaos and critically damaged the gasoline sector,
power sector and grocery division of New York and new jersey and this tends to harm the
supply of goods and services. The increase in demand was oppositely used by petrol pump,
hotels and grocery store and they limited their supply by charging more money from the
customers.

b. Explore both possibilities (Supply and Demand)with figures/diagrams,

demonstrating the various possible scenarios, first from a supply perspective and then
again from a demand perspective to see if anything changes in the case.

Demand & Supply Curve

12
10 10
10
8 8
Price of a Gallon

8
6 6
6
4 4
4

0
0 50 100 150 200 250
Number of gallons of gasoline available

Demand for Gasoline Supply for Gasoline

From the above graph we can conclude that supply was less and demand was more . The price was high
gave downward sloping demand curve because though the demand was there but very few people were
ready to buy goods and services at higher prices
The above diagram shows the demand of Gasoline During the hurricane crisis, the demand were
increased and the prices were increased from p to p1

The above diagram shows the supply of the gasoline during the Hurricane Crisis
Q.2:
a. In the case, how the situation of ‘shortage’ would be dealt with: both from an
economic perspective and ethical dimensions?
Ans :- Economic perspective:
As far as economic perspective is concerned financial help should be provided to the
affected people from the storm i.e. hurricane sandy. Good medical facilities, fooding stuff and
various other goods and services should be provided to them. The government should set up
their own NGOs type companies that will help these people in case of any natural calamity.

Ethical perspective:
As far as ethical perspective is concerned, a person should possess a good character like he
should not use this disaster as a way to earn hefty sum of money, these are considered as
unethical practices.
I think every person should be on the same page in case of a natural disaster like people
should take decisions collectively,taking decisions individually can make the situation more
worse and this is unethical.

b. Discuss why the first measure served to exacerbate the crisis rather than solve it and
why the second was ultimately not an appropriate long-Term?
Ans :-The first measure that was taken to exacerbate the crisis was to import gasoline from
other areas and this measure came very late into practice and the whole damage was already
done and people already suffered a lot as this measure was required at the starting of the
crisis so it was of no use.

The second measure was to impose a price cap on the gasoline and according to me it was
not an appropriate long term solution because the price cap couldn’t control the excess
amount that was charged during the crisis period instead of this government should take the
initiative on their own by providing goods and services to the affected people which will stop
the excess pricing charged by the dealers.