Sugercane crop got damaged in UP it eent price of sugar roaring in delhi. Use a diagram and economic theory to analyse the statement
Dear Student,
Sugarcane crop in UP is damaged and price in Delhi is roaring . We can explain this statement in this way:
Sugarcane is the basic raw material which is used to make sugar and sugarcane which is raw material is used to make sugar and sold in parts of Delhi. When there is change in the availability of raw material there will be change in the prices of the commodity. This statement uses the theory of excess of demand over supply.
Due to unavailability of raw material there is a backward shift in the supply curve and a decrease in supply curve.so in this situation there is excess of demand over supply. Due to more demand , price of the sugar increases to be in equilibrium.
Hope this information will clear your doubts .
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards
Sugarcane crop in UP is damaged and price in Delhi is roaring . We can explain this statement in this way:
Sugarcane is the basic raw material which is used to make sugar and sugarcane which is raw material is used to make sugar and sold in parts of Delhi. When there is change in the availability of raw material there will be change in the prices of the commodity. This statement uses the theory of excess of demand over supply.
Due to unavailability of raw material there is a backward shift in the supply curve and a decrease in supply curve.so in this situation there is excess of demand over supply. Due to more demand , price of the sugar increases to be in equilibrium.
Hope this information will clear your doubts .
If you have any more doubts just ask on the forum and our experts will try to help you out as soon as possible.
Regards