Understanding economics, or how the economy works, doesn’t have to be difficult; but it is very important. The economy is the system of resources and wealth of a nation. This is important to understand because it affects everyone by determining prices. The two most important forces in the economy are supply and demand. Supply is how much of something is available. Demand is how much people want of this good. If there is a high supply (a lot of the good) but a low demand (few people want it) then it will probably be cheap. If there is a low supply (not very much of the good) but a high demand (a lot of people want it) then the price will probably be high.
It is difficult to control demand because it is based on the wants of many people. It is easier to control supply, and often organizations do try and raise the price. One example is the Federation of Quebec Maple Syrup Producers. They have a lot of control, and in some ways this is good because it keeps Canada’s maple syrup valuable and high quality. Canada is famous for its syrup, and this country makes a lot of it. It is one of the most important exports. It is hard to control how much the trees produce every year, but if there is too much maple syrup available at once (high supply, low demand) the price will fall.
Because maple syrup is a large part of the Canadian economy, if the price of syrup fell too low it could have large effects on the people who make maple syrup and on all of Canada. It is estimated that in 2012 Quebec produced 96.1 million pounds or $270 million of maple syrup. To keep the price higher and stable, the Federation of Quebec Maple Syrup Producers has a warehouse where it stockpiles barrels full of maple syrup called strategic reserves. This is how the organization controls the supply and influence the price.
Some people, producers (the people who make the syrup) and consumers (people who buy the syrup), don’t like the price or the rules that the Federation of Quebec Maple Syrup Producers has set. These people may illegally sell and buy maple syrup for different prices; this is called a black market.
