The article shows an avocado market have a very high demand because customers want to buy it and this is a common product in almost all supermarkets but the market supply is very poor at that time.
As we know that, when the price is increasing, quantity demand will decrease and quantity supply will increase. Base on the theory we can analyse how the price go up.
There are two reasons why the price of avocado is rising.
The first reason is the decrease in supply is cause of the lack of workforce, which is called technology element in market supply and weather is an issue having impact on supply.
A decrease in supply will shift the curve to the left. At the Pe point, which is original price, shortages will appear. Besides, the competition among buyers will make the price going up. …show more content…
At the Equilibrium price, a shortage is created. The competition among buyer will make the price go up. As a result, quantity demand will be decrease and quantity supply will be increase. This will continue untill the market ends up with higher price and higher quantity demand and all the shortages are eliminated.
Question 2:
The article indicates the avocados market has a significant increase in supply because there are various new avocados areas will be showed up. In addition, there is also a rapid increase in demand. A variety of marketing strategies and health campaign are used to made an increase in demand. Both demand curve and supply curve will shift rightward.
There are three difference situations of price of avocados when both demand and supply go up.
The first one shows that when both supply and demand increase as the same rate. The Equilibrium Price will not change and the quantity demand will increase. (1)
The second expected price presents that when the change in demand curve is smaller than supply one. The equilibrium price will go down and quantity will increase at the time the market ends up.
As we know that, when the price is increasing, quantity demand will decrease and quantity supply will increase. Base on the theory we can analyse how the price go up.
There are two reasons why the price of avocado is rising.
The first reason is the decrease in supply is cause of the lack of workforce, which is called technology element in market supply and weather is an issue having impact on supply.
A decrease in supply will shift the curve to the left. At the Pe point, which is original price, shortages will appear. Besides, the competition among buyers will make the price going up. …show more content…
At the Equilibrium price, a shortage is created. The competition among buyer will make the price go up. As a result, quantity demand will be decrease and quantity supply will be increase. This will continue untill the market ends up with higher price and higher quantity demand and all the shortages are eliminated.
Question 2:
The article indicates the avocados market has a significant increase in supply because there are various new avocados areas will be showed up. In addition, there is also a rapid increase in demand. A variety of marketing strategies and health campaign are used to made an increase in demand. Both demand curve and supply curve will shift rightward.
There are three difference situations of price of avocados when both demand and supply go up.
The first one shows that when both supply and demand increase as the same rate. The Equilibrium Price will not change and the quantity demand will increase. (1)
The second expected price presents that when the change in demand curve is smaller than supply one. The equilibrium price will go down and quantity will increase at the time the market ends up.