Demand and the supply for milk
1.Demand and supply for milk
D0 S0 S1
D1
Price
S0 D0
S1 D1
Demand and supply
2.Equilibrium
When the prices of milk are higher, then the quantity of milk supplied will be higher. The equilibrium price and equilibrium quantity occur when the supply and demand curves cross each other. The equilibrium for our case is reached when the quantity of milk demanded is equal to the quantity of milk supplied.
- The coronavirus pandemic has affected the demand and the supply for milk. The reason for this conclusion is that the consumers of the milk products have stopped demanding the milk products. The supply for milk has increased while the demand has decreased as the restaurants, schools, and other milk processing units have been shut down for a few months now. The prices of milk products have reduced as a result of the much dumping going on in the market.
- An increase in supply with a decrease in the demand for milk has caused there to be excess supply in the market, which has led to dumping. Dumping of milk has led to a decrease in the prices of milk. Dumping of the milk has led to increased demand for milk from other countries. An increase in the price of milk leads to a shift in the demand curve to the left, while an increase in the price of milk will lead to a shift in the supply curve to the right.
- The issue of dumping is bad to an economy as it may disadvantage some companies and benefit others. For instance, in our case, milk prices have gone low due to the increased supply. This has led to the dumping of milk to other countries. The farmers have to sell their products at lower prices, making them not make profits.