Taking Risks and Making Profits Within the Dynamic Business Environment, Essay Example

Natural Disasters are an unpredictable tragedy, but when they occur emergency crews are the first to respond, including fire department, police department, and ambulances that goes to the places that are in need of much help. They call in emergency services from other cities and counties to help out as well. The first entities however to respond are usually are the local government, which firsts surveys the disaster than ask for the federal government to step in when things are more than they can handle. The drill of first responders then continues with aid from local and global charities, FEMA, Red Cross, volunteers, and other relief programs. They will continue at the disaster site until everyone is rescued and the situation is under control.

As far as the economic systems best suited there are multiple answers but a free market is the best economic system as a solution for crisis of epic proportion. A free market economy is an economy where the market is relatively free. The private sector owns most resources which leaves the government that practices a laissez faire economic policy, open for facilitating and aiding economic activity. In a disaster, money will be allocating in rebuilding, sending resources, and sending aid.

A socialist society is a system that would more than likely have an immediate impact and have a greater control on handling emergency situations. Socialism caters to the needs of the people first; the government would be the one in distributing goods and services to the people ensuring that everyone will be able to receive assistance. The society would be already prepared in disastrous situation with money and aid readily available to help cleanup. (Nickels, McHugh, & and McHugh, 2010)

When disasters hit it is immediately recognized that the prices of known goods such as water, food, and gas tend to rise dramatically. A way to explain this price rise is by using the law of supply and demand. When demand is low or quantity is high the seller will usually drop the price to sell the product, but in the case when disasters hit the demand is usually high and the price will rise, the lower the quantity the higher the price will rise. (Investopedia, 2012) Quantities are usually in short supply due to damages of stocks and the possibility of holdups due to weather. When more supplies are available the prices will normalize.

References

Law of Supply and Demand. (2012). Investopedia. Online. Retrieved from: http://www.investopedia.com/terms/l/law-of-supply-demand.asp#axzz2HhpTGoWy

Nickels W., McHugh & McHugh. (2010). Understanding Business. McGraw-Hill Irwin