Questions On The Banana Prices Essay
Topic a) Banana Prices in QLD
Increase in banana prices will lead to fall in demand and moves the point on the demand curve to the left. However, supply will increase as it will beneficial to suppliers to provide = bananas at a higher price. But to regain equilibrium there should be a reduction in supply that will shift the supply curve upwards.
Topic b) Green Tea Market in China
Due to low prices for this particular tea in the previous years, the amount of land set aside for growing the tea in Hangzhou, Zhejiang in the current season had been halved. Therefore this would lead to decrease in supply. As well, some scientific research indicated that this particular green tea is an effective antidote to the swine flu that had been spread out in some regions in China. Due to this demand must have increased. Therefore decrease in supply and increase in demand, price of Longjing Green Tea has increased.
As the amount of land set aside for growing the tea in the current season had been halved, so quantity of tea produced will decrease in comparison to previous year. even if demand is increased and price has increased 30 fold , supply or production can 't be increased.
The demand for good is an inverse relationship between price and quantity. The graphical relationship between price and quantity demanded is depicted by the demand curve. Any point on the demand curve shows the quantity consumer demands for any particular…