price and quantity of dairy a technological essay

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Cost and Volume of Milk

A Scientific Study Reports Milk Good for the Human Body

When this occurs, the quantity of milk demanded increases. The increase in the quantity of dairy demanded from this scenario can be attributed to the change in customer preferences. In this article, the number of consumers demanding the merchandise (for the declared benefits) will increase. Further, it is also likely that the existing consumers of milk increases their usage of the same. The demand curve in this case will change to the correct.

Outbreak of the Mad Cow Disease

With this scenario, the amount of milk required will not transform. The reason for it has got to do with the reality so far, there is not any evidence linking the consumption of dairy from bovine having the upset cow disease with any adverse well being effects about those who ingest such milk. The key assumption here is the public is definitely well informed that such milk is undamaging. However , should certainly we substitute milk with beef with this scenario, points will be different. Studies have in the past indicated that the intake of gound beef from a cow affected by the mad cow disease has adverse effects on the overall health of individuals. Hence when it comes to beef, the outbreak with the mad cow disease would decrease the volume of beef demanded hence switching the demand competition of meat to the left. This occurrence could take place as people increase their demand for replacement products such as mutton.

c. A Decline in the Price of Milk

A decrease in the price of milk will bring about an increase in the necessity for the same. It is crucial to note that in this case, as opposed to the demand shape shifting, actions will be skilled along the require curve. The decrease in the buying price of milk could also bring about a decrease in the number of the same supplied as suppliers engage in various other farming actions deemed more profitable than dairy farming. The presumption in this case is that suppliers will want to preserve, bunch and retail outlet the dairy in anticipation of better prices in the future or quit dairy farming altogether. The decrease in the buying price of milk in cases like this may also result in an increase in the need for cookies (as a complement to milk). The decrease in the cost of milk could be as a result of a decrease in the demand for cookies consequently pushing down the demand for milk.

m. A Price Limit on Dairy is applied by the Govt

The effect this will likely have is determined by whether the selling price ceiling applied on milk by the government is previously mentioned or under the equilibrium price. According to Lipsey and Chrystal (2007), when the maximum price collection for a specific commodity happens to be above the balance price, after that such a move would not have any effect. Thus in our case, if the authorities sets the purchase price ceiling of milk over a equilibrium value of the same, then such a move could have no impact on both the require and supply from the product. Nevertheless , as Lipsey and Chrystal (2007) explain, “if the most price is arranged below the equilibrium price, a shortage is going to develop” In our case, a shortage of milk will push-up the demand for the similar. On the other hand, the provision of dairy will lower as dairy maqui berry farmers seek to avoid the low prices of the product on the market. Those in dairy farming may choose to pursue additional income generating activities like whole wheat farming and give up dairy products farming altogether. This is what will bring about a reduction in the supply of milk.

Component 2: Determinants of Value Elasticity

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