Macro-economical Side of World Price of Wheat Assignment

Macro-economical Side of World Price of Wheat - Assignment ExampleNormally, when a life-threatening has in high spirits consider with a given supply, the set for the same tends to come up and when it is demanded by a few, the harm tends to come down. But, it is to be noticed that this relationship between toll, demand, and supply do not hold well always. There are exceptions to this general rule. However, in the case of commodities that are normally consumed, this rule can be applied. It can be, therefore, inferred that demand and supply are two opposite extremes of the same phenomenon and when it comes together (it is necessary), the price is determined, called the balance price. This equilibrium price ensures that criterion demanded is just equal to the quantity supplied at any time stopover and this decides the price of that good (Forget 1999, p. 141). In the context of a tramper in the price of enriched wheat dredge in Malaysia, the following demand-supply model is sug gested.The price of wheat here is determined by the forces of quantity demanded and supplied. The quantity of wheat supplied at any time is the amount of wheat that the suppliers are ready to offer at a certain price. Similarly, the amount of quantity of wheat demanded by consumers implies the quantity that consumers are ready to corrupt at a certain price. When both demand and supply interact together at a point, the price is determined. This situation is known as the equilibrium price. This situation gets affected when there is a mismatch between quantity supplied and demanded. At this juncture, the quantity demanded does not coincide with what is offered by suppliers and thereby the price reaches disequilibrium. This price disequilibrium gets adjusted by either a price cut or a price hike as the case may be and eventually reaches the price equilibrium. The major reason put advancing here for the inevitable price hike is the shortage of wheat in the home market. When there is a shortage of an essential good, the demand for the same would increase as a certain amount of the good is consumed daily. Therefore, when there is a shortage in the supply of wheat in the country, the demand for wheat flour increases and naturally there is an adjustment of price. However, this economic problem can be overcome by geological fault the consumption of wheat from enriched wheat to normal wheat. The price of normal wheat will not be affected much as it is abundantly available. Hence, the authorities can proceed with stabilizing the price at a level where the consumers in the home market will not be harmed much. Explain the determinants of the price elasticity of demand as they apply to the demand for wheat. Use your conclusions about the price elasticity of demand to explain what they imply about the revenue that Australian wheat farmers are likely to receive as a consequence of the poor harvests in AustraliaPrice Elasticity of Demand of a good is commonly understood as the degree to which the consumers respond to a change in price. If the consumers are highly antiphonal that they demand more of the good, when there is a price cut, the good id said to have price elasticity. It is metrical by a coefficient. When the coefficient is high, the good is highly elastic and vice versa (Hoag 2006, p. 102).