Supply, Demand and Price Elasticity Paper

The concerns for the 5% of the Australian population who are currently facing food insecurity are predominantly due to reduced access to nutritious food, particularly in rural and remote areas and low socio economic issues around affordability. However as a nation, Australia has more food than it needs and as such has numerous for opportunities for trade, including wheat, barley, diary and beef.

Coming from a long line of farmers, our family table appreciates wheat. Growing up, my grandmother and mother raised me in the kitchen. From taking harvest meals to the field, to family dinners at home, our family loves cooking. I have learned many recipes form the women in my life, but there is one in particular I love: Garden Herb Braid Bread. To some, wheat may not be a commodity, but as a farmer’s daughter, I respect the drudgery that goes into bread being placed on the table come dinner time.

Elasticity of demand is the relationship between the demands for a product with respect to its price. Generally, when the demand for a product is high, the price of the product decreases. When demand decreases, prices tend to climb. Products that exhibit the characteristics of elasticity of demand are usually cars, appliances and other luxury items. Items such as clothing, medicine and food are considered to be necessities. Essential items usually possess inelasticity of demand. When this occurs prices do not change significantly.

In the early 1990s, the farm economy in the heartland of the United States was weak. Farmers in North Dakota produced hard, amber Durham wheat and exported 75% to Italy for the production of high quality pasta. Prices for raw wheat fluctuated radically, depending on weather and growing conditions. Many farmers were having difficulty meeting payments for the expensive farm machin- ery required for crop production. Small family farms were disappearing and non-farm jobs in the area were scarce. Although consumers were paying record prices for food, many farmers felt that processors, who converted the raw grains into finished products for sale in

Recent medical advances have greatly enhanced the ability to successfully transplant organs and tissue. Forty-five years ago the first successful kidney transplant was performed in the United States, followed twenty years later by the first heart transplant. Statistics from the United Network for Organ Sharing (ONOS) indicate that in 1998 a total of 20,961 transplants were performed in the United States. Although the number of transplants has risen sharply in recent years, the demand for organs far outweighs the supply. To date, more than 65,000 people are on the national organ transplant waiting list and about 4,000 of them will die this year- about 11 every day- while waiting for a chance to extend their life through organ donation

Therefore, those who receive SNAP benefits can only buy food staples such as wheat. Since there will be approximately 48 million Americans that will only be allowed to purchase food staples, such as wheat, the domestic demand of this commodity will increase. However, with the application of this bill the supply of wheat exports will go down in the long run causing an increase in price and a decrease in quantity, as shown in figure 1.04. However, in the short run the demand for exported wheat will decrease provoking an increase in both price and quantity, also shown in figure 1.04. Accordingly, displaying how the modification of the US Farm Bill will affect the price and quantity of wheat exported out of the US in the short and long

The article which I chose in this assignment comes from “The Michigan Daily”, which is a newspaper native to the state of Michigan and its residents. The main subject of the article is the recent increase in season ticket prices for the University of Michigan football games. This price increase will mostly impact the students of the University of Michigan who are normal in attendance, but will also impact the loyal non-student fans as well. Michigan is a nationally renowned college football powerhouse who is famous for its enormous stadium and its extremely loyal fans.

But when wheat prices decreased, farmers needed to increase more produces to make ends meet

The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the

Fill in the matrix below and describe how changes in price or quantity of the goods and services affect either supply or demand and the equilibrium price. Use the graphs from your book and the Tomlinson video tutorials as a tool to help you answer questions about the changes in price and quantity

Abstract—Recent works have indicated that the price of computers is a key factor in explaining the growth of computer spending. However, it remains unclear whether the price elasticity of the demand for computers is constant over time. Findings on the pattern of price elasticity will have important implications in the study of information technology (IT) innovation diffusion. To test the hypothesis of dynamic price elasticity, we extend existing growth models to include a price factor with different elasticity specifications. Nested specifications of three growth models were

Price elasticity of demand enables business organizations to predict how their total revenue will be effected in the event they change the prices of their products. When a given good has inelastic price elasticity of demand i.e. Ed 1, then the percentage change in the quantity demanded is greater that the change in price. Thus, raising the prices of such commodities results to decline in the total revenue because the business may loss customers to their competitors. Nonetheless, reducing the prices of goods with elastic elasticity of demand increases the total

1. Economics – the efficient allocation of the scarce means of production toward the satisfaction of human needs and wants.

Since firms facing an elastic demand can increase total revenue when they cut prices, the opposite condition exists when they try to raise prices. With many substitutes in consumption available, a price increase leads to a significant decline in consumption - the percentage change in quantity demanded exceeds the percentage change in price. Producers that raise prices when facing an elastic demand will find that total revenues decrease as the gain from charging higher prices is more than offset by a desertion of consumers to cheaper substitutes, with sales and output falling. When price

Elasticity of demand is shown when the demands for a service or goods vary according to the price. Cross-price elasticity is shown by a change in the demand for an item relative to the change in the price of another. For substitutes, when there is a price increase of an item, there is an increase in the demand for another item. When viewing complements, if there is an increase in the price of an item, the demand for another item decreases. Income elasticity is shown when there is a change in the demand for a good relative to a change in income. This concept is shown in how people will change their spending habits when their income levels change. For