Buffer stocks and stabilization funds - stabilize farm price, Managerial Economics

Assignment Help:

Buffer stocks and stabilization funds

In this case the government buys up part of the supply when output is excessive, stores this surplus, and resells it to consumers in times of shortage or reduced supply. The amounts that the government must buy or sell to stabilize incomes will therefore depend on the elasticity of demand.

In practice this normally operates through a marketing board controlling the industry, with monopoly powers to fix prices to producers. The Board will usually guarantee a minimum price for the commodity and may make an initial payment to the grower followed by an additional payment if sales by the Board subsequently realize a price in excess of the minimum. Producers of the crop are thus encouraged by the knowledge that any decrease in price during the season will be moderated by Government action.

In the stabilization Funds, the Government fix the price. When the demand is high, the government shall retain the difference, and subsidize the price to producers when demand is low.


Related Discussions:- Buffer stocks and stabilization funds - stabilize farm price

Ramsey pricing, explain in detail ramsey pricing with example?

explain in detail ramsey pricing with example?

Relation between average cost and marginal cost, Q. Relation between averag...

Q. Relation between average cost and marginal cost? Relationship between MC and AC are the following: If MC is below AC then AC should be falling. This is because, if MC

Attributes in designing a good tax system, Question: a. What are the b...

Question: a. What are the basic attributes in designing a good tax system? b. Explain briefly how tax systems affect economic efficiency. c. The trade unionists advocat

Stock market investors, A hypothetical AD-AS model for Canada Durin...

A hypothetical AD-AS model for Canada During the 1990s, many stock market investors in Canada became optimistic about information technology and bid up stock prices, more t

Show the fixed proportion production function, Q. Show the Fixed Proportion...

Q. Show the Fixed Proportion Production Function? A fixed proportion production function is one in that technology needs a fixed combination of inputs, say labour and capital,

Short run production function, Explain the short-run production function wi...

Explain the short-run production function with one variable input with the help of assumed figures. Clearly indicate the three stages of physical product, using table and graphs.

Shift in the supply curve, Shifts in the supply curve Shifts in the su...

Shifts in the supply curve Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entir

Explain about the pricing analysis, Explain about the Pricing analysis ...

Explain about the Pricing analysis Microeconomic methods are employed to examine lots of pricing decisions. This includes transfer pricing, price discrimination, joint product

Avoiding surplus and inadequate production, Q. Avoiding Surplus and Inadequ...

Q. Avoiding Surplus and Inadequate Production? Demand forecasting is essential for the new and old organisations. It is somewhat necessary if an organisation is engaged in larg

What is demand theory, What is Demand theory: Demand theory relates to ...

What is Demand theory: Demand theory relates to the study of consumer behaviour. It addresses questions like what incites a consumer to buy a particular product, why do consume

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd