Garlic prices soar in China THE price of garlic has shot up 40-fold this year in China, the world's largest producer of the plant, in part due to an unexpected factor - a popular belief that it can help ward off swine flu. The soaring prices have created a new breed of millionaire, as businessmen and savvy speculators cash in big on the newfound demand for the pungent bulbs. 'Now speculators have rushed in to buy up garlic by the truckload because the garlic market is relatively small and easy to manipulate.' Last month, the wholesale price of garlic in eastern Shandong province - the country's garlic-producing heartland - rose to nine yuan per kg (S$1.83), from 0.2 yuan a year earlier, state Xinhua news agency reported this week. 1. Using the characteristics of perfect competition, explain why are garlic producers price-takers. 2. Illustrate how a perfectly competitive fim is a price taker adopting the market's selling price of garlic.

Garlic prices soar in China THE price of garlic has shot up 40-fold this year in China, the world's largest producer of the plant, in part due to an unexpected factor - a popular belief that it can help ward off swine flu. The soaring prices have created a new breed of millionaire, as businessmen and savvy speculators cash in big on the newfound demand for the pungent bulbs. 'Now speculators have rushed in to buy up garlic by the truckload because the garlic market is relatively small and easy to manipulate.' Last month, the wholesale price of garlic in eastern Shandong province - the country's garlic-producing heartland - rose to nine yuan per kg (S$1.83), from 0.2 yuan a year earlier, state Xinhua news agency reported this week. 1. Using the characteristics of perfect competition, explain why are garlic producers price-takers. 2. Illustrate how a perfectly competitive fim is a price taker adopting the market's selling price of garlic.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 10PA

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