Answer to Question #103591 in Microeconomics for Sunday AFO

Question

1. What are the difference between agricultural products and non agricultural product prices
2. Explain the nature of supply and demand for agricultural products

Answer 1

1. Agricultural products pricing is generally spot products hence their pricing has various determinants;

a.General farm and non farm relationships

b.Price changes with market levels

c. Prices are determined over space

d. Quality attributes

e. Passage of time

On the other hand Non Agricultural products pricing is usually a predetermined pricing structure clearly stated and are not affected by external factors

2.The supply and demand nature of agricultural products is determined by price as it represents the equilibrium of supply and demand. The market conditions like the weather conditions,crop failure are determinants of supply but prices fluctate depending on how the above changes affect the availability of products