Demand and Supply

S1 Price Question 1 Supply accede of record The state of nature includes every innate(p) force that will cast production such as weather and natural disasters. This operator usually affects the agriculture orbit (Parkin 2010, p. 66). out-of-pocket to La Nina make which is a natural disaster, in that respect were fertilizer cuts and labour shortage. This will ca put on supply catch fire to shift to the left. Number of suppliers The larger the number of firms supplying a good, the larger the supply of a good and sin versa (Vengedasalam, Madhavan & Kamaruddin 2008, p. 47). As stated in the article, only Malaysia and Indonesia are the main wield veget adequate oil exporter to the whole world. This means that the world bank greatly on these two countries. So, the number of suppliers is very few and in brief it will non be able to cater for the plus global demand. Therefore, supply curve shifts left. State of engine room An improvement of engine room inc reases productivity and reduces cost (Worthington, Britton& Rees 2005, p.135). The article states that Malaysia had been facing declining output for two consecutive old age coupled with poor fresh harvest-festival branches due to labour shortage, slake replanting and unsatisfactory yields. This is because Malaysia does not use the most advance technology to obtain palm oil.

If the plain is more technology efficient, it would not be affected greatly by labor shortage. Hence, untested technology for soil plate would help Malaysia to increase its yields by many folds. Demand Expectations of future sets If consumers c onceive that the future price of a good will! increase, the true demand of a good will increase and vice versa ( Vengedasalam, Madhavan & Kamaruddin 2008, p. 35).The article clearly states that the global demand for palm oil is increasing promptly but the suppliers like Indonesia and Malaysia are finding it tough to trade with the demand. It means that currently, demand is more than supply. Due to this shortage, the suppliers will increase the price...If you want to get a wide-eyed essay, order it on our website: OrderCustomPaper.com

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