Econ Article Analysis Assignment Example | Topics and Well Written Essays - 1500 words

Econ Article Analysis - Assignment Example This left them with options of either to cut back on farming sharply or to buy water up to four times the regular price. Therefore, this excerpt summarizes various economic theories that are highlighted on the article by fortune Tech. Notably, supply and demand is a critical in economics; essentially, demand refers to the desire of a product or services by buyers whereas supply refers to the extent to which the market can offer. In other words, demand is the price that people are willing to purchase the demand quantity and this relationship forms a demand relationship. On the other hand, the amount that suppliers will be willing to supply given a certain offer is the quantity supplied and this correlation is termed as supply relationship. For instance, there comes a time that supply outstrips the demand and an example would be the case of a third generation farmer â€Å"Woolf† who grows onions garlic and tomatoes. Her intentions were to cultivate on half of her farm since customers were asking more of their product. They cannot deliver because water is still the problem3. Experts have said that an estimate of 500 000 acres of rich land will be left fallow this year and keeping in line with the laws of demand and supply food prices will rise. Most of the things with high demand are very limited. Since we live in a world where wants are unlimited, the available resources to satisfy our wants are limited too. Demand and supply explain how prices are determined in a market system. This is reflected by the demand curve and a demanding schedule. The law of demand has a negative correlation between quantity of goods that consumers need and the price they are ready and able to pay, when other factors are held constant. The factors that affect demand other than price include price of related goods that are substitutes and compliments, income, tastes and preference, population and demographics, and expected future prices. Therefore, changes in any of these