Summary

Agricultural products like fresh vegetables, wheat, and corns are considered as “necessaries” in our daily life and have no close substitutes in the short run. The amount consumers spend on basic foodstuffs occupied only a small proportion of our total income. Demand for foodstuffs and demand for raw agricultural commodities like grains and soybeans which are often use as inputs for final products (derived demand) are therefore inelastic and not responsive to changes in prices although changes in supply often result in price fluctuations in agricultural market.
However, demand and supply for manufactured products will be more elastic especially if the products are luxurious, consumers require to use up a big proportion of their income to acquire them and markets exists many close substitutes. When additional cost of producing one more unit of output is low and there are spare capacity and raw material, firms will respond to changes in prices and shift resources to......

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Title: Why The Price Of Agriculural Products Are More Volatile?
Approximate Word Count: 2948
Approximate Pages: 12 (250 words per double-spaced page)

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