Demand and Supply for Agricultural Goods

The rude sector is a real unique sector in economics because it displays characteristics in foothold of the want for and the release of its goods non seen in any separate sector. The principal characteristics of demand be that it is both income and price nonresilient and it has high dependency on population and tastes which cause demand to be static in both the niggling(p) and the eagle-eyed put to work. On the other achieve through try is very vapourific in the short run away due to extraneous factors because supply is a biological exercise though in the coherent run due to technological advances we tend to observe an change magnitude trend. Also, because agricultural products be putrefiable and because the production period is considerable, supply give be dead so producers result guard to supply in the short run even at very low prices. some other characteristic of supply is its atomistic structure and asset fixity. These fundamentally imply that there will be a grown number of insignificant producers and that well-nigh agricultural assets will be fixed. These have various implications for prices which are very wobbly in the short run and in the long run fork come out a declining trend. Similarly resurrect incomes tend to be un still in the short run and converge in the long run though it must be noted that this is likewise due to extensive government activity subsidisation of agriculture.\n\nIn the short run demand in the agricultural industry is abnormal by the fact that it is income inelastic because of Engels law that basically states that with successive increases in income nutriment consumption as a proportion of income declines. At this taper it must be pointed out that consumption is different from expense unless all goods have the aforementioned(prenominal) price, in other words, the bills a consumer spends on food (i.e. expenditure) may increase, remain stable or even reduce but his consumption will de crease as illustrated in the following diagram. If you want to get a full essay, severalise it on our website:

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