Market Equilibration

In: Business and Management

Submitted By idgirl1
Words 574
Pages 3
Market Equilibration Process
Dee Fullington
University of Phoenix

ECO/561
Kathleen Crump
May 2, 2011

Market Equilibration Process
The last time I bought fresh produce, it was sticker shock. I decided to do a little research into why produce is so expensive. I discovered I bought the produce in the United States grower’s off-season. Produce has elevated prices in the off-season because of imported produce into the United States from foreign companies that has opposite growing seasons.
Another reason for the shock is the cost of producing fresh produce. The cost has risen at approximately 4% annually since the beginning of the 2000s. Reasons for the elevated costs of growing produce is linked to new regulations for land use, importing costs and regulations, weather, irrigation, and technology. Along with the above reasons, market information for supply and demand will also help determine quantities and price.
Market information will tell what the consumers buying trends are, if they are buying a substitute product at a reduced price or if the consumer is buying the product at the current price. Wholesalers will know what the demand for consumers and producers are. Market information informs growers of the type of crops the consumer demands, the quantity, and the season. By studying the market information the growers can plan the types of crops they plant and when they plant. The market information will also inform the growers of predictable and unpredictable changes.
Demand for produce is inelastic so informed growers know current changes, or if there is a sudden environmental change, they know the price of growing a crop escalates. Even predictable changes will affect the demand for produce. Trends are a predictable change that will affect the bottom line for a grower. One of the latest trends is consumers trying to eat healthier, which means a greater…...

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