What is the relationship between demand and supply in agriculture?

JAMB Agricultural Science 2023 229 views
Source: JAMB · 2023

What is the relationship between demand and supply in agriculture?

  1. Demand and supply in agriculture are unrelated.
  2. Demand in agriculture is independent of supply.
  3. Supply in agriculture is determined solely by demand.
  4. Demand and supply in agriculture are interdependent. ✓
Explanation

Demand and supply are inversely related to price. Higher prices reduce demand but increase supply. Lower prices increase demand but reduce supply. Equilibrium balances both.

Agricultural markets are volatile: weather affects supply unpredictably, demand for food is steady, and products are perishable.

Government interventions (price supports, buffer stocks) try to stabilize agricultural markets for farmer and consumer benefit.

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