Supply and Demand The Case of Milk

Supply and Demand The Case of Milk Milk prices are soaring. Millions of consumers all over the world buy milk products on a daily basis and are not willing to give them up. Climate change, competition among biofuel producers, trade policies and other factors drive global milk prices and turn milk into one of the most expensive food products (Arnold, 2007). â€Å"Cows are fed with corn and as more corn is diverted to energy production, feed costs and dairy farmers in turn pass those costs up the food chain† (Doherty, 2007).Advertising We will write a custom essay sample on Supply and Demand: The Case of Milk specifically for you for only $16.05 $11/page Learn More Simultaneously, international milk producers fail to cope with the growing demand for milk. The demand for milk products is at all-time high (Arnold, 2007). The roaring global economy and rising incomes in India, China, and Latin America make the task of producing enough milk extremely challenging and virtually unachievable (A rnold, 2007). Milk products are similar to gasoline: consumers cannot give them up even when the price grows unbearable (Doherty, 2007). Financial experts predict that, as the price of milk increases, the demand for milk products is likely to remain unchanged (Doherty, 2007). Apparently, the elasticity of demand for milk and milk products is extremely low. Put simply, the global demand for milk and milk products is not responsive to changes in milk prices. It should be noted, that elasticity is the central measure of market responsiveness in microeconomics (Baumol Blinder, 2008). The main determinants of demand elasticity include the nature of the good, availability of substitutes, household budgets, and passage of time (Rittenberg Tregarthen, 2011). The nature of the good is directly related to demand elasticity: necessities like food products tend to have inelastic demand curves (Baumol Blinder, 2008). This is particularly the case of milk, since many consumers perceive milk as the fundamental ingredient of their diets and large food manufacturers use milk in their products. Milk does not have close substitutes, and substitutability remains one of the main factors of demand elasticity in microeconomics (Baumol Blinder, 2008). Given that the demand for milk is highly inelastic, the demand curve for milk will look as follows: Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Fig.1. Inelastic demand for milk and milk products. Thousands of consumers spend their budgets on milk, because they believe it to be useful for their health. Consumers take the usefulness of milk for granted (Doherty, 2007). They treat milk as an excellent source of cheap proteins (Doherty, 2007). Therefore, if an advertising campaign spreads the message that milk helps to reduce weight, the quantity demanded will soar. Fig.2. Changes in quantity demanded and price after the adverti sing campaign. The price of milk in the short-term period will remain unchanged, as the growing demand for milk products does not reduce the costs of milk production. In short-term periods farmers will also experience the shortage of supply. In the long run, the price of milk will increase to create new market equilibrium. A mad cow disease epidemic will reduce the amount of milk in the market. The quantity demanded will drop, since customers will not be willing to purchase milk products and get infected. The supply curve will move to the left together with the demand curve. The price of milk will remain unchanged.Advertising We will write a custom essay sample on Supply and Demand: The Case of Milk specifically for you for only $16.05 $11/page Learn More Changes in the price of milk will cause no shifts in the demand curve. However, the quantity demanded will change. Consumers will want to purchase more milk at a lower price. An increase in the demand for milk products will manifest through movements along the demand curve. However, as the demand for milk increases, most farmers will fail to supply enough milk to the market, followed by the shortage of milk products. Consequentially, changes in the price of milk may move the supply curve to the left: possibly, milk manufacturers will have to adopt new technologies to meet the growing demand for milk. How the government price ceiling for milk affects the supply and demand of milk products depends on whether the ceiling price is below or above the market-determined equilibrium. Actually, the government price ceiling for agricultural products is a frequent object of microeconomic analysis. The government is believed to produce heavy influences on the stability and equilibrium in the milk market. The government-imposed price ceiling above the market-established equilibrium price will have no effects on either the supply or demand of milk. By contrast, the ceiling price below the market-e stablished equilibrium will cause profound effects on the supply and demand of milk. Farmers will not be able to charge the market price for milk. Some suppliers may choose to leave the milk market. Reduced supply will cause the shortage of milk products in the market. Consumers will fail to meet their demand for milk and milk products. Price control is one of the most controversial aspects of the market-government relationship. Government price ceilings reduce consumer prices, whereas price floors increase firms’ revenues and incomes (Economics Help, 2008). Consumers believe that government price ceilings limit suppliers’ ambitions and make goods and service affordable. Government price ceilings alter the market equilibrium in the agricultural market. Price controls are associated with numerous disadvantages. First, government price ceilings lead to the shortage of goods in the market (Economics Help, 2008).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Second, government controls of minimum prices raise consumer prices and result in oversupply of products and production inefficiency (Economics Help, 2008). Given that milk does not have close substitutes and is considered a food necessity, its demand is inelastic. As a result, any increase in price for milk will inevitably lead to an increase in total revenues, as slight reductions in quantity demanded are a trifle, compared with the revenues earned from increased prices (Quick MBA, 2011). Conclusion Milk prices are soaring. More consumers are willing to have milk in their diets. Climate changes, new technologies, and increased consumer incomes make the task of producing enough milk virtually unachievable. The elasticity of demand for milk and milk products is extremely low. Put simply, the global demand for milk and milk products is not responsive to changes in milk prices. Many consumers perceive milk as the fundamental ingredient of their diets and large food manufacturers use m ilk in their products. Milk does not have close substitutes, and substitutability remains one of the main factors of demand elasticity in microeconomics. When an advertising campaign spreads the message that milk helps to reduce weight, the quantity demanded will soar. Changes in the price of milk will cause no shifts in the demand curve. Any increase in price for milk will inevitably lead to an increase in total revenues, as slight reductions in quantity demanded are a trifle compared with the revenues earned from increased prices. References Arnold, W. (2007). A thirst for milk bred by new wealth sends prices soaring. The New York Times. Retrieved from nytimes.com/2007/09/04/business/worldbusiness/04milk.html Baumol, W.J. Blinder, A.S. (2008). Microeconomics: Principles and policy. Boston: Cengage Learning. Doherty, R.E. (2007). Milk demand stays strong despite high prices. Reuters. Retrieved from reuters.com/article/2007/06/20/us-milk-prices-idUSN2024940220070620 Economics Help . (2008). Price controls – advantages and disadvantages. Economics Help. Retrieved from economicshelp.org/blog/economics/price-controls-advantages-and-disadvantages/ Quick MBA. (2011). Price elasticity of demand. Quick MBA. Retrieved from quickmba.com/econ/micro/elas/ped.shtml Rittenberg, L. Tregarthen, T. (2011). Principles of microeconomics. Flatworld Knowledge. Retrieved from flatworldknowledge.com/node/28279#web-28281

Behavior Management Tips and Techniques

Behavior Management Tips and Techniques As teachers, we often have to deal uncooperative or disrespectful behavior from our students. To eliminate this behavior, its important to address it quickly. A great way to do this is by using a few simple behavior management strategies that help promote appropriate behavior. Morning Message The best way to start your day in an organized way is with a morning message to your students. Each morning, write a short message on the front board that includes quick tasks for the students to complete. These short tasks will keep the students busy and, in turn, eliminate the chaos and chatter in the morning. Example: Good morning Class! Its a beautiful day today! Try and see how many words you can create from the phrase beautiful day. Pick a Stick To help manage the classroom and avoid hurt feelings, assign each student a number in the beginning of the school year. Put each students number on a Popsicle stick, and use these sticks to choose helpers, line leaders or when you need to call on someone for an answer. These sticks can also be used with your behavior management chart. Traffic Control This classic behavior modification system has proven to work in elementary classrooms. All you need to do is make a traffic light on the bulletin board  and place the students names or numbers (use the number sticks from the idea above) in the green section of the light. Then, as you monitor the students behavior throughout the day, place their name or number under the appropriately-colored section. For instance, if a student becomes disruptive, give them a warning and place their name on the yellow light. If this behavior continues, place their name on the red light and either call home or write a letter to the parent. It’s a simple concept that the students seem to understand, and once they go on yellow light, that is usually enough to turn their behavior around. Keep Quiet There are going to be times when you receive a phone call or another teacher needs your assistance. But, how do you keep the students quiet while attending to your priority? Thats easy; just make a bet with them! If they can stay quite without you asking them, and for the whole time youre busy with your task, then they win. You can bet extra free time, a pizza party, or other fun rewards.   Prize Incentive To help promote good behavior throughout the day, try a prize box incentive. If a student wants a chance at picking from the prize box at the end of the day they must†¦(stay on green light, hand in homework assignments, complete tasks throughout the day, etc.) At the end of each day, award the students that had good behavior and/or completed the task assigned. Prize Ideas: SuckersCandyPencilsErasersBraceletsStampsStickersAny small trinket Stick and Save A great way to motivate students to keep on track and reward for good behavior is to use sticky notes. Every time you see a student displaying good behavior, place a sticky note in the corner of their desk. At the end of the day, each student can turn in their sticky notes for a reward. This strategy works best during transitions. Simply place a sticky note on the desk of the first person who is ready for the lesson to eliminate wasted time in between lessons. Looking for more information? Try a behavior management clip chart, or learn the 5 tools to manage young learners.