What side of the market is affected?
What will happen in the market for honey?
How will the market for jam and marmalade be affected by changes in the honey market?
Upon what will the extent of the changes in these markets depend?
Good one for IB micro internal assessment!
If honey is such a significant commodity in people’s daily life (demand is high and maybe inelastic in certain case), the supply of honey should increase in order to meet the market’s wants as well; as the weather is getting more capricious in the uk, the government may have to subsidize beekeepers to build mini lodges for farming bees, thus the honey yield may be more stable than they had the past summer.
ReplyDeleteAgricultural markets are notoriously unstable. I'm not sure how easy it is to establish more hives, but you are right, normally rising prices should encourage firms to expand. The trouble is if that happens and next year is a good year for bees we then get excess supply.
ReplyDeleteIf I'm honest, I hate honey, and bees are the one thing I am scared of... I think it's the fur and general buzziness. However Honey is quite a unique tasting product used in a lot of cooking and is liked by a lot of people, because of this there would be substantial effects on various markets and will have an effect on wildlife in England due to their prolific pollination. An obvious substitute effect will be an increase in the purchasing of other such condiments like jam etc however I think this link is strenuous as honey (like I have preciously said) is a unique product with little relation to the other products in the same area. When I see honey in my cupboard I assume it a cooking product more so than a spread. This is think is also due to the change in the branding and marketing of the product. Sine I was very young I have noticed a change from branding like jams with more colours to a more simple design with more information about the product I assume because of a realisation that the market is in cooking more so than spreading. Due to this I think that the real effect of a loss of honey in the market would have more of an effect on products that rely on it like many cereals (breakfast not the grain) and particularly meats that use honey in the cooking of them. This means that that a decrease of honey may have little substitution effect and more so a massive decline in the complimentary products that use honey.
ReplyDeleteBeside this the effect on English wildlife would be that English country side will see a decline in flowers particularly rarer wild flowers that rely on bees for pollination. This will have less of an economic effect although I'm sure it will effect agriculture in some way.
The only solution to this problem I can possibly see i the close control of bee farms, possibly that they have to release a certain amount of bees every so often to encourage a growth in the wild population. However this is asking a lot of private companies and is unlikely to go down well. As mentioned in the above comment Agricultural markets are unstable and so trying to boost the amount of hives is probably less then wise from an economical standing however it could be done under a broader title and scheme. For example as opposed to making more hives pushing money into cultivation of gardens in rural areas and the close examining and intervening with the way in which flowers grow and the bees and other such bugs and animals breed. This again is a tough option for two reasons, it is expensive and offers no guaranteed effects but more poignantly weather is a key issue for bees and other such creatures. The climate change has had great effect and maybe we can be offered no real alternative but to move on and hope for a return of the bee (with or without human intervention).
To conclude the main effect in point form:
-complimentary products will have to change or stop being produced
-some supplementary products may increase (possibly)
-there is little humans can do to truly alter the ultimate outcome with out a great deal of unprofitable cost that may bring about only a prolonging to the enevitable
In all honestly I'm ok with them dying out i'm sure someone can still make me some honey cheerios in a lab and I'll pay a couple of extra quid if need be.
Since honey is important for our life, beekeepers should find out other ways to keep producing enough honey from bees for the demand of people, but not only depending on the weather conditions, as the weather conditions may change rapidly, which will affect the supply of honey.
ReplyDeleteThe market of jam and marmalade may increase, because of the substitute effect; however honey is different from jam at some points, jam is obviously a spread for bread, but honey can be used in other uses, for example cooking, baking, addition to various beverages, such as tea; therefore honey still has its own unique market, it may not affect the other similar products e.g jam and marmalade at all.
As the article has mentioned about due to the bad weather conditions over the summer, the amount of honey yields from hives fall by almost three quarter. That's a enormous amount of number.
ReplyDeleteThe most obvious consequences would be the price of the honey. Honey is quite demanding all over the places as they might use in multi purposes. Therefore the demand for honey is still remain the same. However due to the bad weather conditions, there is no doubt that the supply is going to be affected. If the demand still remain the same but the supply decreases, the price of the honey will increases. Once the prices has increased, according to law of demand the quantity demanded will decrease.
If the price of honey increases that the people might choose other substitutes goods like jam and marmalade to replace honey. Eventually the demand for honey is going to decrease.
What side of the market is affected? Supply
ReplyDeleteWhat will happen in the market for honey? The supply curve will shift up/right
How will the markets for jam and marmalade be affected by changes in the honey market? Assuming people consider these to be substitute goods for honey (arguably it could be other things such a syrup) the demand for jam and marmalade will increase.
Upon what will the extent of changes in these markets depend? The extent to which people see jam and marmalade as a substitute.
In my opinion, the decrease in the population of bees, although economics related as shown above, is a greater issue for the wildlife of the world as the pollination that bees do is crucial for many different plants and without bees there is the potential for a domino effect in many habitats.
Grace N
I agree with Grace. If the honey supply decreases all that much, then people will have to find alternatives or substitutes which can't be too much of a problem. But the effect on the wildlife is potentially catastrophic! So much so, that the decrease in bees which pollenate a lot of plants that make the substitutes for honey to decrease, then we'd have a major problem. I hope that a governing body will be able to step in with help soon, maybe as suggested by introducing new hives.
ReplyDelete