Demand & Supply Analysis

Headline:Jakarta: Poor food distribution, bad squeeze come out of the closet worsen worth problem Source:The chief Times Date:Friday, 10 family 2010 Summary Newspapers reports and figures released by Indonesias Central Statistic Agency confirm that consumers rush been forking out more(prenominal) for staples and other food items. The some(prenominal) reasons that constitute to the emerging food harms atomic number 18 seasonal fort in consumption, additional income, lack of decent infrastructure and weather. colligate Economic Concepts engage of a product refers to sum of gold which tidy sum be willing and able to buy at contrastive sets, in a specified time period, ceteris paribus. Change in pauperism (for a given supply swerve) If one of the non-price determinants of adopt changes, the penury rationalize will shift. [pic] When the rent of food increases, the demand curve will shift to the right. Both the balance price a nd quantity will increase. Economic Analysis As mentioned in the article, during the Aidilfitri jolly period, the demand of staples and other food items increases. Staples and other food items are considered as normal goods. The demand increases only when consumers income increases. This was evident in the article as civil servants got their bonuses which will lead to higher(prenominal) consumption power.

As a result, everyone ended spending more money on staples and food items during the festive season and thus resulted in the rise in food prices. From the economic perspective, when the demand of a good increases due to a non-price dete! rminant, the demand curve will shift to the right (D to D1) as shown in plot 1 below. The equilibrium quantity will increase from Q0 to Q1 and the equilibrium price will increase from P0 to P1. Diagram 1 [pic] Conclusion To suss out the rising prices of staples and other food items, Indonesia government may move into price control on certain products during the festive season. Controls bath undertake a price ceiling, or a...If you want to draw in a full essay, order it on our website: OrderCustomPaper.com

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