Specifically as the infrastructure and institutions for organic food production

Specifically as the infrastructure and institutions

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Specifically, as the infrastructure and institutions for organic food production, processing, and distribution become larger and more
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Discuss the demand and supply factors that determine the output of organic food and evaluate which is the most important factor. [25] Suggested Point 4: However, the rapid technological advancement and reaping of more economics of scale may change the outlook of organic food production ( ↑supply ) Fall in cost of production higher profit per unit of organic food sold rightward shift of supply curve from S 0 to S 1 . [economic analysis] Ceteris paribus, at the initial price 0P 0 , a surplus of Q 0 Q 2 arises and this surplus exerts a downward pressure on price . Producers lower the price to get rid of their excess stock. As price falls, producers will reduce their quantity supplied of the good as shown by a movement along the supply curve. Consumers increase their quantity demanded of the good ↓P and ↑Q . [link]
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Discuss the demand and supply factors that determine the output of organic food and evaluate which is the most important factor. [25] Suggested Point 5: PED of organic food – likely to be <1 (use when supply rises) Individuals who are committed to the ideals and lifestyle associated with organic food , OR who have high incomes , and are unaware or insensitive to price changes are unlikely to discontinue purchasing organic food. The first group is very unlikely to alter organic food purchases based on price movements, due to strong convictions about the complex interactions between agricultural chemicals, human health, and the environment. The second group of consumers does not alter consumption habits when prices of organic food change, simply because they spend a very small fraction of their income on food . As a result, price increases are unimportant to these individuals, and consumption decisions are unlikely to be affected by price demand for organic food for these groups of consumers is price inelastic . This means
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Discuss the demand and supply factors that determine the output of organic food and evaluate which is the most important factor. [25] Suggested Point 5: PED of organic food – likely to be <1 (use when supply rises) Hence, as seen in the figure above, with the same rise in supply, the extent of rise in equilibrium output for organic food is smaller from Q 0 to Q i rather than from Q 0 to Q e .
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Discuss the demand and supply factors that determine the output of organic food and evaluate which is the most important factor. [25] Suggested Evaluation: Ways to evaluate: Both demand (income, tastes and preferences) and supply (technology, EOS) factors are important, but need to justify one (how?) What do you observe in the real world these days? Is there more organic food being sold because of advancements in technology? Or is technology being forced to advance because of the need to meet the increasing human demand?
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