Effects of hoarding on market prices - Essay Example

Only on StudentShare

Extract of sample
Effects of hoarding on market prices

As a basic economic rule, whenever a supply of a particular item is less than the quantity demanded, the former puts inflationary pressure on the price of the goods and prices increase, if the quantity supplied could not match the quantity demanded. This can be shown through pictorial representation:
The above diagram shows how hoarding affects the equilibrium condition in the market and increases the market prices. If we explain the above diagram, we can easily see that the Indian food is at a point e, where demand and supply equal at market price p1 and at quantity Q. However, as soon as the hoarding activity, this results in supply curve being shift to s1 from initial supply curve of S. As a result of this a new equilibrium is formed at the point e1. At this point the quantity is below the initial quantity of Q at Q1. (Sloman, 2004) Similarly, due to this a shortage has been created and people with more money are ruling the market by the virtue of being able to pay higher prices. As a result the market price of food items increases high and now the food stuff is available at a higher market price of p1. As a result this hoarding decreases the supply and increases the market prices. ...Show more


This article talks about the effects of hoarding on market prices of food items. According to the article, the price of food items has soared due to massive hoarding activities of businessmen and people in their search of increase in profits and due to poor monsoon season…
Author : parkerara
Save Your Time for More Important Things
Let us write a custom essay on your topic
"Effects of hoarding on market prices"
with a personal 20% discount.
Find out more

Related Essays

Urban Land Prices in a Market System
Urban Land Prices in a Market System We refer to factor of demand as the willingness and the ability of businesses to employ the factors of production and put them to productive use. On the other hand, factor supply is the willingness by the businesses to offer these factors of production so that they can be put to productive usage further.
3 pages (750 words) Essay
The Effects of Decreasing Oil Prices on OPEC Creator States
In September 1960, at the initiative of the Venezuelan Energy and Mines minister Juan Pablo Prez Alfonzo and the Saudi Arabian Energy and Mines minister Abdullah al-Tariki, the governments of Iraq, Iran, Kuwait, Saudi Arabia and Venezuela met in Baghdad to discuss ways to increase the price of the crude oil produced by their respective countries.
10 pages (2500 words) Essay
Gasoline Prices
For example, each additional ten cents per gallon adds as much as $14 billion to American gasoline expenses. In order to understand the importance of gasoline for the national economy, it is essential to look at the market and what factors are affecting the price of gasoline.
6 pages (1500 words) Essay
Shanghai Commercial Real Estate Market Is there a Bubble under Prosperity
A full list of the references employed has been included. The Shanghai market has been the focus of much attention in China and abroad as its real estate markets takes off with impressive vigor. Since the 1997 Asian Financial Crisis, Shanghai has succeeded in capitalizing on the demand for prime Asian commercial real estate by opening up its markets to foreign investors and local purchasers alike.
41 pages (10250 words) Essay
Money and Banking
il outs which are seen as the most appropriate measure, the problem proves to be so much deeper and the solution will not lead to creating the effect that the government aims to promote through the measure. According to the article, as the government addresses the crisis by
3 pages (750 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email