Week 4_Relationship bw Agriproduct n food market

Week 4_Relationship bw Agriproduct n food market - LESE204...

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Unformatted text preview: LESE204 Department of Food and Resource Economics Relationship between Agricultural Products and Food Markets LESE204 Department of Food and Resource Economics Relationship between Agricultural Products and Food Markets Qa Pa Q 1 Market for agricultural products Sai b DA 1 f Case 1: All the products are sold as fresh products ) ( i i i a i Q C Q P Individual farmers profit maximization problem ) ( i i i a Q Q C P ) ( i i a Q mc P : supply curve for individual i (Sai) Sai Horizontal Summation of mc i yields supply curve. Sai LESE204 Department of Food and Resource Economics Relationship between Agricultural Products and Food Markets Qa Pa Q 1 Market for agricultural products Sai b DA 1 f Case 1: All the products are sold as fresh products ) ( i i i a i Q C Q P Individual farmers profit maximization problem ) ( i i i a Q Q C P ) ( i i a Q mc P : supply curve for individual i (Sai) Sai Example. Individual producer 1: Pa = mc(q1) = 3 + 2 q1 Individual producer 2: Pa = mc(q2) = 1 + 4 q2 Supply curve at market level q1 = 1/2Pa - 3/2 q2 = 1/4Pa q1+q2 = Q = 3/4Pa 7/4 Sai LESE204 Department of Food and Resource Economics Relationship between Agricultural Products and Food Markets Qa Pa Q 1 Market for agricultural products Sai b Da 1 f Case 1: All the products are sold as fresh products Sai Sai Sa ) ( i i a Q mc P : supply curve for individual i (Sai) Supply and Demand curves yield the equilibrium price....
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This note was uploaded on 03/25/2012 for the course MAR 3023 taught by Professor Lutz during the Fall '08 term at University of Florida.

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Week 4_Relationship bw Agriproduct n food market - LESE204...

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