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Impact of Food Prices on Demand and Supply

   

Added on  2020-03-01

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Running head: INTRODUCTION TO ECONOMICSINTRODUCTION TO ECONOMICSName of the studentName of the universityAuthor note
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1INTRODUCTION TO ECONOMICSTopic- Global food prices falls, demand decreases, supply improves-world bank- Economics deals with two broad categories demand and supply of economic resources andservices with an aim of earning profit. Demand is the willingness or the wants and necessitiesmade by the consumers or the customers. It means the willingness to purchase a commodity inexchange of money at a place called market (Alston and Okrent 2017). It includes the factors ofprice and quantity. Law of demand says that with the rise in price creates less demand, on theother side fall in price will create more demand and purchasing power for the product.Supply on the other side means the fulfilling of those wants and willingness made by the consumers or the customers. Due to good weather condition, supply rises with good production. Supply depends on market factors, technology, and production unit and price factor. According the supply law, Supply rises with the rise in price and quantity (Thirlwall and Pacheco-López 2017). As per World Bank report, Due to poverty, there was fall in the demand for the purchase of food,global food prices decline. As a result, supply increase as the decrease in price created morepurchasing for the product. Consumer will not purchase those products that consist of high ratescompared to market value. As it is poverty ridden, therefore by lowering the price on wheat,corn there will be strong rise in the demand for that product, due to which economy achievesgrowth and stability.
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