Based on an internet news “Fish demand ‘exceeds UK sea supply’” published by press
association at http://www.guardian.co.uk/environment/2012/aug/21/fish-demand-uk-sea-supply on 21 August 2012, United Kingdom is a Kingdom which combined
by England, Scotland, Wales, Northern Ireland and many subsidiary islands. Most
of the land of United Kingdom surrounded by ocean and seas which are Atlantic
Ocean, Celtic Sea, North Sea, English Channel and Irish Sea. Fisheries of
United Kingdom is very developed because surrounded by seas and ocean, as a
result most of the British mainly eat fish. Developed of fisheries supply
British with a lot of marine products, so the price of fish is cheap and this
causes British willing to eat fish. Slowly, British adapt to eat fish and fish
had become their important food, even became their traditional food (fish
steak). In the opinion of British, haddock and cod are the most suitable ingredients
to make fish steak. Therefore demand of haddock and cod had increased for
several years, in order to satisfy demand of British, fisherman of United
Kingdom captured a large figure of haddock and cod every day, finally this
caused overfishing of haddock and cod. The resources of haddock and cod in
United Kingdom’s seas has obvious decreased, however so far the resources of
haddock and cod still can cope the demand of British. The decreased of cod and
haddock had caused the attention of United Kingdom’s government. In order to let
the next generation to have enough haddock and cod to enjoy, rules for the management
of the UK’s fisheries quotas has been made and issued by the fisheries
administrations in United Kingdom which is authorize by government of United
Kingdom. The rule for fisheries quotas allowed the fish stocks to recover from
overfishing; on contrast, it caused a shortage for haddock and cod. An internet
new reported that the United Kingdom fish consumption in 2012 has already
matched what their seas can supply the fish for them in this year on 20th
of August. Which means, if United Kingdom only depend their own fisheries for
the year without imported would cause them out of stock (haddock and cod) today
(report from the New Economic Foundation (NEF) which calculated it), because
the Annual fish supplies from United Kingdom’s seas can only satisfy the demand
of British for 233 days. Therefore the heading of the internet new is fish
demand ‘exceeds UK seas supply’.
Even though United
Kingdom is a big fishing country, but the supply of fish still cannot satisfy
the demand of British, the supply of fish can only satisfy 2/3 of the internal
demands. Therefore, the price of fish (haddock and cod) is getting higher and
higher, it is because according to the price adjustments of market equilibrium
and the phenomenon of price of fish getting higher and higher can be
illustrated through the (graph 1). Assume that graph 1 is Equilibrium of
haddocks.
Graph 1 lists
the quantity demanded and quantity supplied as well as the shortage and surplus
at certain price. If the price of haddock is two pounds per piece, 40 thousands
of haddocks per day are demanded and 30 thousands of haddocks are supplied.
There is a shortage of 10 thousands haddocks per day and the price rises. If
the price is three pounds per piece, 28 thousands of haddocks per days are
demanded and 42 thousands of haddocks are supplied. There is a surplus of 14
thousands of haddocks per day and the price falls. If the price is 2.4 pounds
per piece, 33 thousands of haddocks per day are demanded and 33 thousand s of
haddocks are supplied. There is neither shortage nor surplus and the price doesn't change. Equilibrium price is quantity demanded equal to quantity
supplied, 33 thousands of haddocks per day is the equilibrium quantity.
Market
equilibrium is the price balance the buying and selling plans, equilibrium
price is the price that the quantity demanded equal to quantity supplied,
equilibrium quantity is the quantity demanded and quantity supplied at the
equilibrium price. Market would move toward to its equilibrium because price
adjusts the buying and selling plans. When the price is below equilibrium,
there is a shortage and if the price is above equilibrium, there is a surplus.
When shortage happen, market pressure would make producers either raise the
price or increase the output. When producers raise the price up, the price
would raise to its equilibrium. The rising price can reduce the shortage
because it decrease the quantity demanded and increase the quantity supplied,
the price would raise until its equilibrium (no shortage and no surplus); on
the other, when surplus happen, market pressure would make producers either lower
the price or decrease the output. When producers lower the price, the price
would fall to its equilibrium. The lowering of price can reduce the surplus
because it increase the quantity demanded and decrease the quantity supplied,
the price would fall until its equilibrium (no shortage and no surplus). The
price adjustment is according to the law of demand and law of supply. Law of
demand is the higher the price of a good, the smaller is the quantity demanded;
the lower the price of a good, the greater is the quantity demanded. Law of
supply is the higher the price of a good, the greater is the quantity supplied;
the lower the price of a good, the smaller is the quantity supplied.
In order to
satisfy the other 1/3 of demand, fishmonger of United Kingdom forced to import
fish from outside the EU, this result some demanded of haddock and cod in
United Kingdom reliant on foreign countries such as China and India, therefore
one third of fish that British eat is from other countries. NEF leaders stated
that UK imported 101,000 tons of cod and 60,000 tons of haddock, which worth
372 million pounds and 156 million pounds in 2010. After the fish imported to
United Kingdom, the original graph (graph 2) will look like (graph 3).
The
supply curve would shift rightward (from S to S1). If the supply decreased and
the price remain the same, the supply curve will shift leftward.
I agree the United Kingdom’s
government set up a rule to limit the quota of fish caught, because human can’t
only eat all the specific fish that only they like, if human only eat whatever
fish they like, gradually the specific fish would become fewer and fewer and in
the end it would become extinct. This sense is same as people can’t kill a
goose that lays golden eggs, because once the goose got killed, people would
not get golden eggs anymore. As the same, if human only eat cods and haddocks,
cod and haddock would become extinct, the younger generation would not have the
change to try the taste of cod and haddock, and this unfair to them, so I
totally agree the action of United Kingdom government.
Written by Hoo Kien Meng
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