By Berkeley Hill
This publication presents an easy yet potent creation to economics. totally up to date and revised, this fourth variation contains the new alterations that experience taken position within the atmosphere within which agriculture operates. overlaying the affects of the ecu growth to twenty-eight Member States, significant alterations to monetary help of agriculture, monetary crises, financial recession and, in lots of nations, excessive degrees of unemployment, it offers a rounded and up to date creation to the topic. The inclusion of chapter-focused workouts, essay questions and extra studying feedback make this textbook a useful studying software for college students of agriculture, economics and similar sectors.
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Extra info for An Introduction to Economics for Students of Agriculture
Because of the great practical importance of prices to all sections of the community and to the functioning of the market-based economies of the Western world, it is worth examining more closely the mechanism by which prices are arrived at. To do so we will examine separately the demand for goods, the supply of goods and, thirdly, the ways in which supply and demand interact. A. The Theory of Demand THE MEANING OF DEMAND Demand for a commodity (such as eggs) occurs when people have a Demand and Supply 43 desire for the commodity coupled with the willingness and ability to purchase it.
4 Percentage change in quantity demanded = — X 100 = 80% -2 Percentage change in price = — X 100 = - 20% 10 80% r Price Elasticity of Demand I E r ^ i = = - 4* Up J -20% To ensure that you know how the calculation was done, work out the Price Elasticity of Demand for water using the figures on the graph. You will find that you get a figure much nearer zero. e. e. demand is relatively price-elastic). *This figure is accompanied by a negative sign because a movement along a downwardsloping demand curve involves either a negative change in price (and a positive change in quantity) or a negative change in quantity (but a positive change in price).
The demand for individual brands of petrol is therefore highly price-elastic. But take a second example, milk. If the price of fresh milk were increased, housewives might buy a little less fresh milk and buy more milk powder. However, for many purposes there is no effective substitute for fresh milk, so if the price were raised by a few pence, the total quantity bought would only decrease by a small amount. On the other hand, if the price were lowered, it is unlikely that much increase in sales of milk would occur since there will be little demand transferred to milk from substi tutes.