The paper "Economics and Marketing Commodity" is a brilliant example of an assignment on macro and microeconomics. I disagree with the statement because the two products are substitutes. The rule of substitute goods states that when the price of one commodity increases the demand for the other commodity increases because consumers tend to purchase the other product (Frank, 2008). The decrease in demand for beef due to price increase will result in the increased demand for pork as a substitute good. This can be explained that people are shifting to the consumption of pork and abandoning the consumption of beef (Taylor, 2006).
This can be explained by the high price of beef as compared to the price of pork. There has been a measurable decrease in the quantity demanded of beef. The people of Australia are shifting their demand from beef to the consumption of pork. This has also resulted in many farmers rearing pigs so as to cater to the growing demand (Frank, 2008). Apart from the price of substitute goods, there are other factors that will lead to a change in demand for a given commodity. These factors include the level of income of consumers.
This factor explains that when an individual income goes up their purchasing power also increases (McConnell, & Brue, 2008). Therefore, they will either purchase more of a commodity there are used or they will purchase products they were initially foregoing because of limited income. The decrease in income of consumers affects demand negatively because the purchasing power they initially possessed has been drastically reduced (Frank, 2008). Therefore, they will purchase less of a certain product they were purchasing more when their income had not reduced.
Therefore, in this case, the reduction in demand for beef can be explained by reduction of consumers’ income (Taylor, 2006). Consumer tastes and preferences Changing consumer tastes and preferences have a significant effect on the demand for a given product. There are factors which can lead to the change of tastes and preferences, the factors include persuasive advertising. In this case, there has been a vigorous advertisement for pork and its related products (McConnell, & Brue, 2008). This has made pork a popular product in the country and this has led to people shifting from beef to pork.
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