Today's macroeconomic lesson was spurred on by mangoes and mango smoothies. We have started making mango smoothies again, as the mangoes are just coming into season. As I was cutting up a beautiful specimen, I temporarily despaired, “its too bad that now that mangoes taste better, their price will go up.” I quickly corrected my logic and realized that in fact, the best mangoes are actually the cheapest you'll find all year, (Ksh 20~ 25 cents per big mango). Why is this, it seems counterintuitive that the best mangoes are the cheapest?
Of course, all the economists are yelling, “its supply and demand!” First let's assume that the demand for mangoes is pretty much stable. You're desire for a mango is about the same year round, if a mango were available. The best mangoes tend to come to market during the heart of the mango season, when they've had the full benefit of the rains and heat to produce a large, juicy mango. During that time, supply is at its peak, since mango trees produce mangoes throughout Kenya at about the same time. This increase in amount supplied drives down prices. During the rest of the year, there are some mangoes available, but usually they are lower quality, not as sweet. However, the off-season supply is so low, and the price jumps.
You probably notice the same phenomenon for peaches in the Northeast US. You have to pay an arm and a leg for peaches in december, and they're not that sweet anyway. But those perfect peaches that make your mouth water are not nearly as expensive in July/August (especially if you pick them yourself!).
Well, that ends our econ 101 lesson for the day. While you're enjoying your pumpkin pie, I'll be enjoying a cool mango smoothie.
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