Britons+go+nuts+for+peanut+butter+but+the+old+favourites+continue+to+rule+-+Christy

====Britons go nuts for peanut butter but the old favourites continue to rule ==== Source: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8467079/Britons-go-nuts-for-peanut-butter-but-the-old-favourites-continue-to-rule.html **By [|Jonathan Sibun] ** 2:10PM BST 22 Apr 2011

__Brief Explanation:__ The article shows that there is a sudden increase in demand for peanut butter last year. This is due to the recession as people view it as a low cost treat. (taste) The second reason is due to producers' advertising of peanut butter being a healthier option. (expectation) Therefore, due to the determinants of demand of taste and expectation, as shown on graph 1, the demand of peanut butter increases. The article also imply that the increase in demand of peanut butter increases competition for traditional spreads such as jam. Therefore, the demand of jam decreases due to the determinant of demand of substitutes (Graph 2). But regardless of the decrease in demand of traditional spreads, they are still continuing to dominate the market.

__Vocabulary:__  **Demand:** The quantity of a good or service that consumers are willing and able to purchase at a give price in a given time period.  **Determinants of Demand:** They are the factors that determine demand and lead to an actual shift of the demand curve to either the right or the left.  **Quantity:** the total amount of goods or services  **Recession:** A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. **Producer**: Related to supply. A firm or company that manufactures goods to sell.

__Graph:__  Graph 1: <span style="font-family: Arial,Helvetica,sans-serif;">This graph shows the demand and supply curve of the market for peanut butter. As I mentioned above, there is an increase in demand for peanut butter because of 2 reasons, as a low cost treat and for health. Therefore, as there is a recession, people want to have a low cost treat, this is the determinant of demand of taste, because consumers want low cost treat like peanut butter. Also, as producers advertise that peanut butters are healthier options for them, the increase in demand is due to the determinant of demand of expectation. This is because people expect to live longer when purchasing it. Therefore, due to the determinants of demand of both taste and expectation, the demand of peanut butter increased. This is shown as D1 shifts to the right to D2, increasing both the price and quantity demanded of peanut butter.

Graph 2: On the other hand, the market for jam is shown on graph 2. Peanut butter and jam are substitute goods. Therefore, as the demand for peanut butter increases, the demand for jam decreases. This leads to a decrease in both the price and quantity demanded for jam.

<span style="font-family: Arial,Helvetica,sans-serif;">__Evaluation:__ <span style="font-family: Arial,Helvetica,sans-serif; line-height: normal;">As shown from graph 1, the demand of peanut butter increases due to 2 reasons. Yet, this shows the importance of advertising in a market as it affects consumers' taste and expectation, which will affect the demand of the product. In the article, as the producers advertise peanut butter as a healthier option, consumers began to purchase more, giving the peanut butter industry a demand of £40m last year.

This article also shows the effect of the change in demand on peanut butter on the market of jam. As they are substitute goods, the increase in demand of peanut butter decreases the demand of jam. Yet, the article said that traditional products like Jam continues to dominate. Jam as Britain's most popular spread, has sales of £106m last year. It is almost 2 1/2 times the demand of peanut butter. Personally, i think one of the reason for the demand of peanut butter to be lower than jam is due to allergy. As many people can not eat peanut, the no. of consumers for peanut butter is lower than that of jam.

I think this shows that recession might not always be negative because it actually benefits the peanut butter industry. Also, it is very creative for the peanut butter producers to advertise it as a healthier option to increase demand due to taste and expectation. Yet, this might only be short term because when recession recover, people might go back to more expensive treats. This might affect the demand for peanut butter in the future. Producers have to think about other ways to increase demands. I f firms wish to increase demand, possible solutions might be improving advertisements, such as getting a popular star, or make the peanut butter even more popular. There might also be sales such as 10% off for a higher demand, etc.