ELASTICITY OF SUPPLY TO BE MEASURED IN

SEASONAL FRUITS

PRESENTED BY:
SHRESTHA BHUSHAN
PGDM3

ROLL NO-36

ELASTICITY

Elasticity is a measure of how much buyers and

sellers respond to changes in market conditions
elasticity allows us to analyze supply and demand
with greater precision
if something is elastic it is responsive , flexible ,or
readily changed . a rubber band is elastic and with
little force it easily stretches . A chain on the other
hand is rigid and changes very little when pulled
when consumers are relatively responsive to a
price change , we say that demand is elastic
when the change in quantity demanded by
consumers is relatively small in response to a price
change , we say that demand is In- elastic

India is the second largest producer of Fruits after China , with a

production of 44.04 million tonnes of fruits from an area of 3.72 million
hectares .

Mango is the most important fruit covering about 35 per cent of area and
accounting of 22 per cent total production of total fruits in the country, which is
highest in the world with India 's share of about 54%. India has the richest
collection of mango cultivars. Major mango growing States are Uttar Pradesh,
Bihar, Andhra Pradesh, Orissa, West Bengal, Maharashtra, Gujarat, Karnataka,
Kerala and Tamil Nadu.

Banana comes next in rank occupying about 13 per cent of the total area and
accounting for about 34.2 per cent of the total production of fruits.

Citrus fruits rank 3rd in area and production accounting for About 12 and 10.4
per cent of the total area and production respectively. Lime, lemons, sweet
oranges and mandarin cover bulk of the area under these fruits and are grown
mainly in Maharashtra, Andhra Pradesh, Karnataka, North-Eastern States,
Punjab, Orissa and Madhya Pradesh.

Guava is the fourth most widely grown fruit crop in India . The area under
guava is about 0.15 Million ha producing 1.80 MT.

SEASONAL PRICE CHANGES

In countries with pronounced seasons, supplies are
low at the start of the harvest season, so prices are
high. Prices are at their lowest when the crop
reaches maturity in the main production areas.
At the end of the season prices normally increase
again as supply diminishes. Prices are generally
highest during the off-season, when only a small
percentage of farmers are able to grow the crop.

SUPPLY AND PRICE CHANGES OVER A

SEASONS

FLUCTUATIONS IN PRICE AND PRODUCTION OVER

SEVERAL YEARS

THE EFFECT ON SUPPLY OF CHANGES IN PRICE

Markets are not very rational. Very often they appear to panic
or overreact. If traders believe that there is a shortage of a
product, prices will rise. Often, the increase is out of all
proportion to any shortfall in supply. The converse is also
true. If the market expects even a small oversupply, then
prices fall rapidly.
High prices have a large effect on farmers' profits. In the
short term a farmer's response to high prices will be to try to
increase the quantity of produce marketed. For example,
Mango farmers may sale green, unripe Mango.
In the longer term the farmer will consider expanding the
crop area and look for ways to increase production. In
response to high prices farmers usually increase their
production in the next season. As many of them make the
same decision, there is a large increase in supply and
oversupply occurs. Prices fall and farmers reduce production
in the following season.