In September 2022, the price of food bought from stores in Canada increased by 11.4%, the highest since 1981, and remained high for seven consecutive months. This surge in food prices was due to rising costs throughout the supply chain, including higher prices for essential inputs like feed, fuel, and fertilizer. Small and medium-sized food processors faced challenges like higher prices for transport and packaging materials, along with labor shortages and supply chain disruptions. The food retail sector saw an increase in net income, and concerns were raised about whether the largest retailers were engaging in "price-gouging." The House of Commons Standing Committee on Agriculture and Agri-Food conducted a study and proposed recommendations to address inflationary pressures across the supply chain. Witnesses noted that while food prices have been rising globally, Canada has fared relatively well compared to its counterparts.

The Canadian government should introduce amendments to the Competition Act to grant the Competition Bureau more authority to investigate companies and individuals. The competitive thresholds for mergers and acquisitions should be reviewed to ensure competition in the grocery sector is not compromised. The possibility of establishing a permanent administrative commission should be studied to analyze data on price formation and profit margins in the agri-food supply chain. The government should consider recommendations from the Competition Bureau's market study on the Canadian grocery sector, focusing on price-setting mechanisms, "black-out" periods, revenue sharing, and barriers faced by new entrants. These recommendations aim to strengthen the Competition Bureau's mandate in promoting fair competition and addressing concerns within the grocery industry.

Explain how various elasticities of demand as a quantitative tool could be used to forecast changes in revenues, prices, and/or units sold when speaking of this topic.

Illustrate how changes in prices and income impact an individual's opportunities and equilibrium choices using a budget constraint.

Analyze how this article helps to illuminate the concepts above.