The supplements market is significantly large and we would need all organic foods collectively to measure up. When more employees are hired to work in the dietary supplement industry the pro is induced impacts. More careers directly related to the industry means more earnings and splurging as more jobs are founded.
The employment multiplier is the number that is multiplied by the number of jobs directly involved in the industry to measure the impact the industry will have on a region when it’s successful or failing (Kashian, 2012). In a 2012 report, Dr. Russell Kashian defined induced effect as the result of the family adjusting how they spend as a unit based on a bonus of more pay produced by direct and indirect effects.
The induced effect measures the effects of the changes in household income: employees and suppliers in the dietary supplement industry spend money at restaurants, grocery stores, and shops (Kashian, 2012). Consumption analysis refers to why and how people use products in addition to why and how they buy (Blackwell, Miniard, and Engel (2006). Supply is defined as the quantity of a good the business is willing to sell at an agreed price in the business (Manwik, 2009).
The market for dietary supplements continues to grow significantly. Today’s Dietitian magazine states some of the main reasons for the increase of consumers searching for the perfect dietary supplement product that includes the desire for a longer healthier lifestyle, more energy, weight control, and improved immunity (Palmer, 2010). Branding and positioning are a couple more factors that have influenced the demand and decision to buy specific reputable brand name dietary supplements. Demand is the quantity of goods and services consumers are willing and able to purchase regardless of price (Mankiw, 2009).
Senior citizens struggle with sustaining the best possible health as they would like. It is estimated that nearly 25 percent of the people over age 65 will be living with diabetes, almost one half will have arthritis, and more than one third will be considered obese by the year 2030 (Tindal, 2017). The market for dietary supplements is competitive buyers and sellers. The actions of buyers and sellers will determine the equilibrium.
Changes in Supply and Demand Affect Equilibrium Price
What’s the economic outcome or explanation for this? An IMPLAN input-output model is an instrument for measuring the dietary supplement industry’s economic influence of expenditures (Kashian, 2012). The direct effect is production adjustments coupled with an adjustment in demand for the good (Kashian, 2012). It is the first force on the economy and the spending is developed by the dietary supplement industry.
The University of Wisconsin Whitewater Fiscal and Economic Research Center reported that in 2006, the dietary supplement industry could disclose a national $22.5 billion direct-effected output or productivity. An indirect effect is derived from the fluctuating input needs of directly affected industries. They also found that indirectly, the industry contributed $16 billion while generating $22 billion (Kashian, 2012). Global dietary supplements market size was $126.14 billion in 2016 (Reports and Data, 2018).
In the meantime, the global organic food and beverage market was $110 billion in 2016, fairly close but not nearly as much as the dietary supplements market. Another economic contribution from the dietary supplement industry would be paid taxes. Multiple sectors of the industry paid $10.073 billion in taxes together in 2009, including $4.7 billion to the local government and $5.3 billion to the federal government (Kashian, 2012).
Consumers may even share the expense of taxes with the supplements market without knowing it. The costs can usually be tacked on to the cost of supply price. Tax on the dietary supplements and the factor of production becomes increased costs of production for the dietary supplements market.