The extent to which cost changes pass through a vertically organized production process depends on the value added by each producer in the chain as well as a number of other organizational and marketing factors at each stage of production. Using 36 years of Bureau of Social Statistics price indices data (1972-2008), we model pass-through behavior for bread, two retail food items in two levels of processing.
According to the Organization of Intelligent Economists, price expectation would be one of reason on the changing prices of goods specifically on loaves. When there is expectation of price change, if people expect the price of the good to increase in the near future, then they are more likely to purchase sooner, which would increase the…show more content… According to the trade secretary Gregory L. Dominggo, the price should be kept despite the changed in the cost of flour and the other ingredients.
Another trend for nowadays is that, the production will be based on the consumer demand. Because we still don’t know if the costumers will shift to those of the generic reads present in the locality. But we hope they will start buying more bread because right there are of the excess capacities in the industry to meet the spike in addressing the possible supply shortages of breads.
According to the book of the Pinoy Tasty (2010), there are six factors affecting the bread product’s demand that are as follows:
Six Factor Affecting Bread’s Demand
An increase and decrease of any of these factors affecting demand will result in a shift in the demand curve. Depending in its inward and its outward shift, there will be a shift in the quantity demanded and price.
When there’s an increase in the consumer’s income, there will be an increase in the demand for a good. If the consumer’s income falls then there will be a fall in