Economic Essay Example | Topics and Well Written Essays - 1500 words

Economic - Es state Example equipment casualty is deterrent to consumers consumption consumption but serves as a motivation for the producers and sellers at the same time. However, their behaviors tend to vary on the reactivity to damage changes or snap fastener of the goods and services in question and can be influenced by several(prenominal) factors present in the economy. In the end, rationality will be the guiding principle for both the consumers and the producers in making scotchal decisions. This paper tries to examine the factors related to changes in toll of quetch and the behaviors of both consumers and suppliers of beef towards it. In analyzing price elasticity of the request and supply of beef, discussions on market price, determinants of price elasticity of demand and supply were also made. Related articles on demand and supply of food and grains like corn argon utilized to achieve the goal of producing an intelligent analysis of the issues reflected in the artic le. And for better appreciation of some of these economic concepts, illustrated graphs were also used to help in serving the purpose. 3. Analysis A. Market Price One of the economic goals that be widely, if not accepted in our society and in many another(prenominal) others is the price level stability (McConnell and Brue 1993). This goal aims to avoid the sizable upswings or downswings in the general price level. In a microeconomic perspective, this goal is reached when changes in the market prices are manageable and dont hurt consumers and producers that much. As price is the bar of money paid by the buyers or consumers and received by the sellers or producers for a building block of good or service, it is very important for it to be stable.We need to analyze market prices to extend our understanding of demand and supply and to see the relative efficiency of these in allocating resources. A rise or befall in market prices will have a corresponding effect or impact to the ci tizenry in the economy. In the article, the rise in beef price inflicted by high corn prices, more than exports to protein-hungry nations and the market forces of supply and demand, is causing a pain being felt by beef lovers nationwide. however since some customers like Beth Belling from Omaha are carnivore, they have to have their beef even if hurts them a lower-ranking more. Retailers are also affected by the increasing beef price but they reported that they are absorbing some of the cost increases as much as $1 a pound for many cuts of beef to keep consumers buying. Ruth Comer, a spokeswoman for West Des Moines-based Hy-Vee Supermarkets, said that they try to flatten tabu the price curve as much as they can so the customers dont realize sticker shock when they come in store. They also believe that passing price increases along is freeing to prompt customers to pull back and stop buying or look elsewhere. Restaurant operators also say that higher prices of beef squeeze the ir finances as they become reluctant to raise menu prices. B. Price Elasticity of Demand and Supply The responsiveness of supply and demand to any change in price is measured by the price elasticity. It is expressed as the ratio of the percentage change in the quantity demanded and supplied to the percentage change in price. This value will help us determine the degree of elasticity that a products demand or supply can have. The degree of elasticity, classified as elastic, inelastic, or unit elastic, will tell us the nature of the product (McConnell and Brue 1993). 1. Price Elasticity