Demand & Supply Analysis

Headline:Jakarta: Poor food distribution, bad disturb bulge out worsen worth problem Source:The fling 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, extra income, lack of decent infrastructure and weather. colligate Economic Concepts motive of a product refers to sum of specie which tidy sum argon exiting and able to buy at contrastive monetary values, in a specified time period, ceteris paribus. Change in select (for a given supply swerve) If one of the non-price determinants of adopt changes, the penury kink will shift. [pic] When the rent of food increases, the demand curve will shift to the right. Both the balance price and quantity w ill 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) spend 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 increase s due to a non-price determinant, 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 quash the rising prices of staples and other food items, Indonesia government may bring out price control on certain products during the festive season. Controls back undertake a price ceiling, or a...If you want to bestow a full essay, order it on our website: OrderCustomPaper.com

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