(a) Define the terms demand and supply and state the law governing them. (b) Explain the implications of demand and supply on agricultural production
(a) Demand is defined as the quantity of a commodity which the consumers are willing and able buy at a given price at a time.The Law of demand states that the higher the price of a commodity, the lower the quantity that will be demanded, or the lower the price, the high the quantity of that commodity that will be demanded.
Supply is defined as the quantity of goods which the producers are able and willing to offer for sale at a given price over a period of time. The law of supply states that the higher the price of a commodity, the greater the quantity that will be supplied or the lower the price, the smaller the quantity of goods that will be supplied.
(b) The implications demand and supply on agricultural production are:
(1) When the demand for a farm produce is higher than suppl prices would tend to rise and farmers would be encouraged to produce more of such goods.
(2) But when the demand is lower than supply, prices would fall and the farmers would not be encouraged to produce.
(3) When the price a demand of a commodity are low, producers would also be discouraged from production
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