<h1>PRINCIPLES OF DEMAND AND SUPPLY</h1> CONTENT <ol> <li>Meaning of Demand and Law of Demand</li> <li>The Demand Schedule and Demand Curve</li> <li>Factors Affecting the Demand for Agricultural Produce</li> <li>Movement along the Demand Curve</li> <li>Shift in Demand Curve</li> <li>Elasticity of Demand</li> <li>Meaning of Supply and Law of Supply</li> <li>The Supply Schedule and Supply Curve</li> <li>Factors Affecting the Supply of Agricultural Produce</li> <li>Elasticity of Supply</li> <li>Price Determination</li> </ol>   <h2>Meaning of Demand</h2> Demand can be defined as the quantity of a commodity that an individual is willing and able to buy at a specific price within a given period of time. Demand is more than the desire to have something. It must be backed with the ability to pay the price.   <h2>The Law of Demand</h2> This law states that there is inverse relationship between the price and the quantity of produce demanded. It therefore means that the higher the price the lower the quantity demanded.   <h2>The Demand Schedule</h2> Makes the law of demand explicit. It shows the relationship between the price and the quantity of the commodity demanded. Demand schedule shows the amount of a commodity that a person will buy at various prices in a given period.

<h1>IMPLICATIONS OF DEMAND AND SUPPLY FOR AGRICULTURAL PRODUCTION</h1> CONTENT <ol> <li>Implications of Demand and Supply for Agricultural Production</li> <li>Price Support and its Effects on Agriculture</li> <li>Price Control and Effects on Agriculture</li> <li>Subsidy and its Effects on Agriculture</li> <li>Reasons for Farm Subsidies</li> </ol>   <h2>Implications of Demand and Supply for Agricultural Production</h2> The implications of demand and supply for agricultural production include the following: <ol> <li>When the demand for a farm produce exceeds supply, price tends to rise.</li> <li>When the demand for a farm produce is lower than the supply, the price falls.</li> <li>Increase in the income of the consumer will make them demand for more farm produce vice versa.</li> <li>Increase in the price of produce may lead to low demand for it and shift to the close substitute that has a lower price.</li> <li>High cost of production may lead to low output, low supply and high prices of produce and vice versa.</li> <li>Supply of farm produce will be low when environmental factors for production are unfavorable and vice versa.</li> <li>High cost of farm inputs may lead to low supply and high cost of farm produce and vice versa.</li> <li>If the taste of consumers is in favor of a product, the demand and price of such produce will increase and vice versa.</li> <li>Increase in the number of producers will lead to increase in supply and reduction of price and vice versa.</li> </ol>   <h2>Price Support and its Effects on Agriculture</h2> Price support is the government imposed price floors on selected farm produce. It is also known as ‘minimum prices’ established by the government above equilibrium price. The government supports in the following ways: