Question
Retail demand for eggs was given as in a certain market was given as P_r=23-0.04Q whereas the farm gate demand as P_f=9.8-0.11Q and farm gate
Retail demand for eggs was given as in a certain market was given as P_r=23-0.04Q whereas the farm gate demand as P_f=9.8-0.11Q and farm gate supply P_f=0.38Q. (a) compute the marketing margin [4 marks] (b) If the aggregator charges K12.60 and the wholesaler K15.00, determine the price margins for the aggregator, wholesaler and retailer [6 marks] (c) What costs are attributed to these price margins? [2 marks] (d) compare the elasticity of demand at farm-gate and retail nodes [4 marks] (e) what factors do you think are responsible for the difference in the elasticity of demand between the two nodes in (d)? [2 marks]
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