Elasticity of Pecan Market

This article "Big Plant Won't Lessen Pecan Prices" is about the way the market to get pecans impacts the both the wholesale industry and the housing market for full retail list prices. The article describes how pecans are relatively inelastic around major holiday seasons, such as Thanksgiving and Xmas. It is stated that there was a 150 mil pound embrace pecans from the previous 12 months. Since there is such an excellent increase in variety supplied, the purchase price decreased. Because the demand for pecans is relatively inelastic, consumers are not affected by a change in price. This content also details the difference between the wholesale market and the retail market for pecans. Wholesale markets produce the pecans, promote them to retailers for a reduced price; between seventy-five to eighty-five cents per pound. As the retailers pick the pecans to get a low price, they will turn around promote them to customers for about 5 fold the price they paid for them. The pecan producers have no control over the prices that they promote the pecans at, and so they have no control over the price that the retailers offer the pecans at.

The wholesale pecan market is a perfectly competitive marketplace. There are lots of distinct suppliers, and it's a very standardized item. The demand and supply curves will be relatively inelastic due to the phenomenon for pecans during the vacations. The massive embrace pecans delivered causes the retail price per pound of pecans to decrease significantly. The chart (on the left) symbolizes the increase sought after.

 

The graph above and off to the proper represents the need and minor cost to get a firm. In the retail market, they may have control over the price at which they sell their products to consumers. In the article that they state that the firms purchase the pecans from wholesale markets for a small price, just like eighty-five mere cents, and then they stop and sell similar pecans for $5. 40. A decrease in the price causes a decline in marginal expense.

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