PEORIA, Ill. (WMBD) – In 2020 the economy nearly halted. The covid-19 pandemic quickly spreading leaving some industries looking for answers as they shifted business practices.
“Businesses have to either adjust their spending adjust their prices and then consumers kind of do the same thing in reaction of the changes businesses have to make,” said Greater Peoria Economic Development Council CEO, Chris Setti.
One economics professor at Bradley University, Colin Corbet said this inflation of prices is a reflection of what he calls “elasticities in action.”
“Elasticities are how responsive quantity demand or quantity supply is to a change in price,” said Corbet.
Particularly in products like lumber.
“Especially for things like lumber- where the prices skyrocketed, did we see people actually changing their use of lumber based on prices I mean only a little bit,” said Corbet.
Corbet said lumber mills didn’t expect those prices to last.
“So they just sort of let the prices go up and now prices are coming down from their peak but they are still significantly higher than they were,” said Corbet.
Still, Corbet is optimistic and said with a slow return to normal life, increased prices should start to even out.
“Lots of different prices are sort of dramatically changing now as we’re starting to recover from the pandemic,” said Corbet.