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Advisor

Re: Examples 4 You folks:

Price received is actually a "demand" number......that is different than demand function.

 

say 10b corn x 7 = 70 b.

say 12b corn x 6= 72 b

say 14b corn x 5= 70 b

say 14b corn x 4= 56b

 

the highest demand function of the afore is 12b corn x 6= 72b demand function

 

 

now       perhaps compute a dollar index value into the afore  ( perhaps a factor of the whole ACT of buying which is also demand function.

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Contributor

Re: Running math

I disagree with both of you with regard to "Demand Function".  You are ignoring "supply" which ultimately determines the effect of demand on price.

 

If you have an unlimited supply (which we don't) and you have record demand, the price will still remain low because the supply needs a low price to move the product.  If you have unlimited demand (which we don't) and a limited supply, then the price will skyrocket as if the beef was being auctioned to the highest bidder.

 

What we do have is a limited supply and record demand (that is increasing) which in turn is supporting and driving the price increases.  The record demand is more a function of added markets than it is a function of increased consumption per capita.  The consumption per capita means nothing to the demand if the total numbers of consumers drop to the point of reducing demand.

 

The bottom line is that there is more demand for beef worldwide and the supply is not adequate to meet that demand. 

Senior Contributor

+1


@jonesrods wrote:

I disagree with both of you with regard to "Demand Function".  You are ignoring "supply" which ultimately determines the effect of demand on price.

 

If you have an unlimited supply (which we don't) and you have record demand, the price will still remain low because the supply needs a low price to move the product.  If you have unlimited demand (which we don't) and a limited supply, then the price will skyrocket as if the beef was being auctioned to the highest bidder.

 

What we do have is a limited supply and record demand (that is increasing) which in turn is supporting and driving the price increases.  The record demand is more a function of added markets than it is a function of increased consumption per capita.  The consumption per capita means nothing to the demand if the total numbers of consumers drop to the point of reducing demand.

 

The bottom line is that there is more demand for beef worldwide and the supply is not adequate to meet that demand. 


Good post, Dad.

 

Steph

 

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Advisor

Re: Supply =

volume sold in the demand function equation.

 

demand function = price x volume.

 

jones....you can try to redefine whatever.....then come up with your own econ indices.

 

 

demand function is a Commonly accepted econ term used to measure the ACT of buying ( ie the consumer's goods walked out the door at a value number...based on price paid x how much product they bought.

 

it's used to find optimum price AND the optimum volume that is sold.

 

 

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Veteran Contributor

Re: Examples 4 You folks:

I agree.  Demand and demand function are different.  (Why I disputed the article)

 

Equation is y = mx + b

 

y = demand function  (The higher the total the better-for producer of commodity)

 

m = volume produced

 

x = price

 

b = base price (price that reflects highest supply and lowest demand)

 

Goal is highest demand function.

 

Thorn is that volume(m) and price(x) work inversely.  Higher volume-lower price...supply and demand.

 

Utopia is the right combination.

 

Got close for grain farmers in 2012(except those droughted out).  How about a repeat for everybody.

 

Close for beef(except those droughted out) and pork(except those with pedv) the last year.

 

Problem is the Real World gets in the Way.

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Advisor

Re: Well,

there's perhaps linear demand function....then all kinds of others.

 

I actually learned the simple version ( linear perhaps ) from an outfit that has done a good job of predicting future cattle markets for bout 45 years now.

 

 

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