Ramadhan Price Increases

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1.0 Article Summary The article titles “Food Stocks sufficient for Ramadhan: Trade minister” by The Jakarta Post was published on 9 August 2011. The article reports on how price of staple food during Ramadhan affect the supply and demand of food. 2.0 Introduction In the following year, increase in the price of staples food during Ramadhan has been a habit. As the demand for staples food will increase during the month of Ramadhan, prices of those goods are substantiated to rise. This year, prices of staples food has increased by almost 700% but the government agencies has issued food security strategy to overcome the increase in the price of staples food (Price of food soars for Idul Fitri 2011) As the article has touch on the current situations of food market and consumers responses to the rise in price of staples food during Ramadhan, this report will evaluate the food market during Ramadhan in Indonesia with the support of economic model and theories.This report will investigate its market indeed, analysing demand and supply, elasticity and price controls. Moreover, a reviewed of the whole sections will wind up this report. 1 3.0 Analysis 3.1 Demand and Supply Demand is defined as the whole correspondence between the price of the good and quantity demanded of the good (Garnett et al. 2010, 62) During Ramadhan season, demand is known to rise, as meals cooked during Ramadhan is larger than the usual, this is also because consumers have to cook meals to break the fast (Ramadhan prices swell household expenses 2011) . As suggested, the increased in consumption of food during Ramadhan has induced to an increase in demand of food. The increase in demand, ascribe to non-price , is illustrated by an rightward shift of the demand curve from D0 to D1 in figure 1.1. Thus, new equilibrium and price increases from Q0 to Q1 and P0 to P1, subsequently. 2
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