There has been a veritable explosion of piggery projects in the Philippines. These projects range from backyard hobbies of a couple of heads to big time operations of several hundred heads. The same can be said of ginger production. The attractiveness of the export market has lured many small and big time entrepreneurs to venture into this business. We would like to assume that the projects take the price of hogs and ginger as a major consideration in determining the level of their production. Hog and ginger production, however, are both subject to a peculiarity: once a certain supply is produced, all of it must be dumped into the market. Inventory pile ups are undesirable in these businesses. Considering this peculiarity how is the equilibrium price for hogs and ginger determined? Is there necessarily an equilibrium price? How can a producer in this type of market take advantage of such nature of the market?
There has been a veritable explosion of piggery projects in the Philippines. These projects range from backyard hobbies of a couple of heads to big time operations of several hundred heads. The same can be said of ginger production. The attractiveness of the export market has lured many small and big time entrepreneurs to venture into this business. We would like to assume that the projects take the price of hogs and ginger as a major consideration in determining the level of their production. Hog and ginger production, however, are both subject to a peculiarity: once a certain supply is produced, all of it must be dumped into the market. Inventory pile ups are undesirable in these businesses.
Considering this peculiarity how is the
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