Research shows that milk farmers receive 29 percent of every payment made by the consumer Daily farmers of Washington, Such statistics indicates that retailers and processors gain more than the original producer of the milk. Even worse, this figure might decline further if farmers do not adopt different methods of adding value to their milk. Value addition techniques include pre-processing, packaging and preserving the milk. This allows the farmers to have considerable control of the amount they receive from the overall sale of milk.
Americans have high value for milk and its products. Therefore, milk is one of the products whose demand is likely to remain constant for a long period. Regardless of its price, consumers cannot avoid or replace its use. In addition, milk has great versatility and nutritional value than any other product in the market Daily farmers of Washington, Its preference is high among most home owners, which ensure that its demands remain high.
While the demand for milk has remained high even with an increase in prices, the situation is not the same for all consumers. High and middle class consumers may not feel the pinch of the increasing milk prices. However, low income earners are faced with the problem; of having to strain their income further in order to afford milk. For such consumers, the demand may not remain the same if milk prices continue increasing. Although is not possible to forgo milk consumption, low income earners are forced to reduce the amount of milk they consume.
Bob crop, an agricultural economist of the University of Wisconsin also attests to the fact that some consumers may reduce their consumption rate for milk Daily farmers of Washington, As shown in the following graph the demand for milk does not get to zero even when the prices reach the peak figure 1.
This is called the law of demand. Figure 1. Demand Curve Supply The amount of goods and services firms are able and willing to produce at a given level of prices over a period of time is called Supply.
Firms produce to make maximum profits. Higher the price of a product, more profit the firm would generate. Profit is directly related to prices. This is where consumer choice and opportunity cost came into play.
Some parents chose to forgo the hassle of driving hundreds of miles collectively, checking all of the stores within a certain radius, in exchange for paying three times the price on a second-hand retailer website, such as eBay.
Other parents refused to pay that high of a price point in exchange for continuing to fight for the toy at big-box stores, and the article I chose even talks about a group of parents standing outside of the Target store entrance for several hours in the 20 degree cold weather in order to obtain one on delivery day. Most were unsuccessful Peachman, Fast forward to Christmas season, Hatchimals were a word barely uttered, and now, most children approaching five or six years of age would likely only have a vague idea of what I was talking about if I asked them if they like Hatchimals.
Remember: This is just a sample from a fellow student. As a general common sense rule - 'the higher the price of a particular product the lower will be the demand for it '. Also, the popularity and usefulness of computers continues to grow. Use Supply and Demand analysis to predict how these shocks will affect equilibrium price and quantity of computers.
The increase in prices was as a result of an increase in the cost of processing milk in the United States. Farmers are not responsible over the retail prices of milk in the market. Introduction to Supply and Demand Demand The willingness of consumers to buy a particular good is called demand. D and need assistance with your research paper? For instance, well established companies enjoy the benefit of sales and are able to lower their prices than newly established companies.