Nov 30th Price Discovery

Nov 30th Price - Price Discovery Schrimper Chapter 8 AEC 305 Food and Agricultural Marketing Principles AEC 305 Food and Agricultural Marketing

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Unformatted text preview: Price Discovery 11/30/10 Schrimper Chapter 8 AEC 305, Food and Agricultural Marketing Principles AEC 305, Food and Agricultural Marketing Principles • Today (11/30) • Price Discovery Lecture • In-Class Assignment • Exam III Review • Thursday (12/2) • Exam III Market Structure, Conduct, and Performance AEC 305, Food and Agricultural Marketing Principles AEC 305, Food and Agricultural Marketing Principles Market Structure •# of Buyers and Sellers •Product Similarity •Ease of Entry/Exit •Info Available Market Conduct •Price Decisions •Non Price Decisions (product development, advertising/promotion) •Quantity Decisions Market Performance •Pricing Efficiency •Operational Efficiency •Profits/Distribution •Consumer Preferences •Information Government Oversight/Regulation Price Discovery vs Price Determination • Price Determination – “The use of economic concepts of demand and supply to indicate how the terms of trade (or price) associated with transactions involving an exchange of ownership become established.” Schrimper, p. 328 AEC 305, Food and Agricultural Marketing Principles AEC 305, Food and Agricultural Marketing Principles Price Discovery • Price Discovery – “A mechanism (or processes) by which buyers and sellers find and agree on a mutually satisfactory price for a transfer of ownership of something.” Schrimper p. 328 AEC 305, Food and Agricultural Marketing Principles AEC 305, Food and Agricultural Marketing Principles Compare /Contrast Price Discovery Systems for the Following Group of Buyers and Sellers Ticket Scalpers Autos Garage Sales Horse Sales Cattle Markets Tobacco Markets Fruits Vegetables Hogs Poultry Tobacco Groceries Clothing Textbooks Ebay OPEC Co-ops Ag Price Discovery Systems • Individual Negotiation/Agreements • Organized Markets, Auctions and Exchanges • Group Negotiations/Collective Bargaining • Formula Pricing • Government Intervention • Contracts AEC 305, Food and Agricultural Marketing Principles AEC 305, Food and Agricultural Marketing Principles Note that these price discovery systems can … • vary over time • vary as a commodity moves through the marketing system • vary for a commodity within a given stage of the marketing system • vary within an individual seller for a given commodity Which one(s) will be adopted? The Adoption of a Price Discovery System Depends on … • Which system minimizes the “cost” of discovering price? (i.e., transaction costs such as time, transportation, search/info costs) • Which system provides correct price signals to producers and quality products to consumers • Which system provides equitable returns to both producers and consumers?to both producers and consumers?...
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This note was uploaded on 01/13/2011 for the course AEC aec 305 taught by Professor Dr.williamm.snell during the Spring '10 term at Kentucky.

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Nov 30th Price - Price Discovery Schrimper Chapter 8 AEC 305 Food and Agricultural Marketing Principles AEC 305 Food and Agricultural Marketing

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