Supply and Demand assignment

6 03 2011

Rubber has come to a decline as the prices are significantly high. The raw material price increase is the cause of low supply yields where the largest rubber growers are, Thailand, Indonesia, and Malaysia.  These growers for the second year in a row are failing to meet the demand of this large market worldwide. Raw materials are at a high, as they have increased to as greatly as 15%. This increase of demand and decline of supply is an example of Cost of Factors of Production and Number of Buyers. There is low supply for rubber which relates to cost in natural, capital or labour resources increases, in turn supply decreases. The number of buyers has changed as there is a huge demand for rubber, and now there are more buyers. This has all contributed to a new equilibrium market.




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