Elasticity of Pecan Market :: essays research papers

The article Big Crop Wont Reduce Pecan Prices is about how the grocery for pecans affects the both the wholesale food market and the retail market. The article describes how pecans are relatively inelastic around study holidays, much(prenominal) as Thanksgiving and Christmas. It is demesned that there was a one hundred fifty million pound increase in pecans from the previous year. Since there was such a great increase in quantity supplied, the price decreased. Since the enquire for pecans is relatively inelastic, consumers are not affected by a castrate in price. This article also describes the difference between the wholesale market and the retail market for pecans. Wholesale markets produce the pecans, and swap them to retailers for a number one price between seventy-five to eighty-five cents per pound. While the retailers purchase the pecans for a low price, they turn around and sell them to consumers for about five quantify the price they paid for them. The pecan prod ucers have no project all over the prices that they sell the pecans at, and they have no control over the price that the retailers sell the pecans at. The wholesale pecan market is a perfectly competitive market. on that point are lots of different suppliers, and its a highly alike(p) product. The motive and supply curves are relatively inelastic due to the hysterical neurosis for pecans during the holidays. The massive increase in pecans supplied causes the price per pound of pecans to decrease greatly. The represent (on the left) represents the increase in demand. &65532&65532The graph above and off to the right represents the demand and marginal cost for a firm. In the retail market, they have control over the price at which they sell their products to consumers. In the article they state that the firms buy the pecans from wholesale markets for a small price, like eighty-five cents, and thence they go off and sell the same pecans for $5.50. A decrease in the price causes a decrease in marginal cost.