Problem of agricultural price instability in countries, Business Economics

Is agricultural price instability a problem for Less Developed Countries?

Problem of agricultural price instability for LDCs:

a. Several Less Developed Countries have a comparative advantage into the production of agricultural commodities and goods. They rely onto exports of narrow base of key products to earn foreign currency.

b. Agricultural products endure price instability because of frequent unforeseen conditions. A good harvest increases supply when flood or drought decreases supply.

c. The diagram opposite demonstrates that low price elasticity of demand implies a given change in supply have an important impact on price resulting in important price volatility.

d. A similar diagram can be used to demonstrate the effect onto price of a raise in competition and capacity.

e. The prices of coffee and coca have fallen to thirty-year lows due to bumper crops and new producers for example Vietnam for coffee.

f. The organization of Coffee Producing Countries coffee cartel tried to raise prices by members holding back twenty percent of exports. Non members as like Vietnams imply raised their exports and the scheme and prices collapsed.

Posted Date: 8/29/2013 7:07:55 AM | Location : United States

Related Discussions:- Problem of agricultural price instability in countries, Assignment Help, Ask Question on Problem of agricultural price instability in countries, Get Answer, Expert's Help, Problem of agricultural price instability in countries Discussions

Write discussion on Problem of agricultural price instability in countries
Your posts are moderated
Related Questions

Staff time is generally the principal cost component of an IS project. Define five other areas where project costs could increase. Project costs also occur by: • Contract la

Question 1: (a) "Money demand is inversely related to interest rates and is stable over time." Discuss the theoretical and empirical validity of this statement. (i) Analyse

Subcontracts frequently include penalty clauses to provide the main contractor defence into the case of the supplier’s poor performance. Why are penalty clauses not the complete an

QUESTION No point is better accepted than the fact that the monopoly price is higher and the output smaller than what is socially ideal. The public is the victim. (a) Distin

QUESTION (a) Explain the Law of demand and the factors affecting demand for a product or service. (b) Explain and illustrate diagrammatically how the market demand for a pro

Please turn in the linear program for the following problem. No need to solve the LP. Exercise 3 (Multi-Period Fixed Income Capital Budgeting) As part of the settlement for a class

What is an alternative process strategy to the assembly line that Wheeled Coach currently uses?

How much power or influence does a U.S. President versus a company CEO actually have in a free enterprise system, when it comes to producing jobs or the decision to manufacture co