The price of potatoes in Australia has drastically gone up. A ton of potatoes previously usually cost $400 but now it usually costs $1500 and sometimes even up to $4000. This is a price increase between 325% and 900% of the usual value. This is due to a decrease in supply while demand has not changed. The supply determinant is cost of factors in production. Exceptionally wet weather has caused this. The machinery is unable to traverse the wet ground and the difficulty of removing the wet dirt off of a potato without ruining it. This causes the supply curve to shift left, reducing the quantity of potatoes and increasing prices.
Market: European Cod
The price of cod in Europe has risen steadily in the last year. This increase in price has been caused by an increase in demand and a decrease in supply. The factor behind the increase in demand is the increase of the price of salmon. Since salmon is a substitute good to cod, an increase in the price of salmon led to many buyers purchasing cod instead. This caused the demand curve to shift right. The reason for the decrease in supply is the strike of the Icelandic fishermen. This strike has lowered the number of sellers, thus decreasing the supply of cod. This caused the supply curve to shift left. The combination of the demand curve shifting right and the supply curve shifting left has resulted in a rise in the price of cod.
The price of Raisins is falling in the U.S. The prices of the 2016 crop are 31 percent lower than the prices of the 2015 crop. This is due to a decrease in demand and an increase in supply. The demand determinant responsible for the decrease in prices is Buyer’s Preferences/Consumer’s Taste. A change in consumer tastes is causing a decrease in the consumption of raisins. This causes the demand curve to shift to the left since, at all possible prices, consumers will want to buy fewer raisins. The supply determinant responsible for the decrease in prices is Number of sellers. Throughout the world, there are more producers of raisins. This increase in the number of sellers/producers causes the amount of raisins to increase and the price of raisins to decrease. This change causes the supply curve to shift to the right. Combined both changes cause the equilibrium price to fall.