How is the theory of supply and demand determining prices reflected in the grain and peasants?

Value determines **, supply and demand influence**, and supply and demand have an impact on **, which is reflected in the grain and cheap farmers. Since the ** of millet is cheap, it will lead to. Producer profits are reduced. It is not conducive to the expansion of production by producers and the enhancement of investment confidence.

1. The new theory studies the causal relationship between supply and demand and the first generation. The core ideas of the new ** theory:

The role of supply and demand on **: supply and demand decide**, supply remains unchanged, demand increases, **will**; Demand remains the same, supply increases, ** will fall;

The effect on supply and demand: The effect on supply and demand behavior is feedback, which has both negative feedback and positive feedback, and the result is uncertain;

Formation mechanism: The formation of free competition in the market is called endogenous, and the formation of non-market factors is called exogenous, such as regulation and emotional factors. Endogenous efficiency and incentives, exogenous efficiency and stability.

2. "Grain cheapness hurts farmers" refers to the existence of such an economic phenomenon in agricultural production activities: in the year of harvest, the farmers' income decreases, which is vividly summarized as "grain cheapness hurts the people" in China's folk. When the grain obtains, the relationship between supply and demand changes greatly, and the relative relationship between supply and demand (supply and demand) is different than before, the increase in supply is greater than the increase in demand, and the decline in grain is greater than the increase in demand (increase in sales), so the profits of grain farmers decline.

Grain is cheap and hurts farmers, grain is a necessity in normal goods, no matter how it changes, the demand is certain, so the elasticity of food.

Small. When the grain is harvested, the grain will decline, but the corresponding demand for grain will not change much, so the income of farmers will be less.

Small profits but quick turnover, refers to some **elastic goods, merchants to reduce profits in the way of old cheats**. When the manufacturer lowers the price, it undoubtedly reduces the quality of the product, because the product is elastic, so consumers will increase their purchases. Thus catering to the purpose of merchants to sell more.

Elasticity of demand refers to the degree of sensitivity to changes in the demand for commodities in the market. It is usually expressed as the ratio of the percentage change in demand to the percentage change in **, that is, in terms of the elasticity coefficient of demand. The calculation formula is divided into the point elasticity formula and the arc elasticity formula.

The factors that affect the elasticity of demand for a product are as follows:

1. The importance of products to people's lives. In general, the demand elasticity of daily necessities is small, and the demand elasticity of luxury goods is large;

2. Substitution of goods. The elasticity of demand for commodities that are difficult to replace is small, and the elasticity of demand for commodities that are easy to replace is large;

3. The number of uses of the product. The demand elasticity of a single purpose is small, and the demand elasticity of a wide range of uses is large;

4. The popularity of the product. The demand elasticity of products that have been popularized and saturated in Shizhao society is small, and the demand elasticity of products with low penetration rate is large.

5. The size of the unit price of the product. The demand elasticity of small daily commodities with small unit prices is small, and the demand elasticity of high-end consumer goods with large unit prices is large;

6. Demand impact**.

Demand** is what consumers are willing to pay for each unit of goods when buying a certain number of goods. Demand** changes inversely with the number of buyers guessing Huipin, that is, the more consumers buy goods, the lower the demand**, and the smaller the number of goods bought, the higher the demand**.

The theory of elasticity of demand, in economics, studies dependent variables.

Relative changes in economic variables to independent variables.

The theory of the degree of responsiveness or sensitivity to relative changes in economic variables.

Explained by economic principles, the fundamental reason is that agricultural products are often commodities that lack the elasticity of demand.

The increase in income brought by it is not enough to make up for the decrease in income caused by the decline in **, and the result is that the total income of farmers not only cannot increase but declines, that is, the elasticity is small and the output is not increased. Generally speaking, it is income = **x sales, at this time, ** decreases, sales remain unchanged, so income also decreases, harming the interests of farmers. The profit that farmers get from the best grain depends on two factors:

production (q) and food price (p), profit is the product of both; But these two variables are not independent, but interrelated, and their correlation is determined by a downward sloping line of demand for food, and the two are negatively correlated.

Extended information: "Grain cheapness hurts farmers" refers to the existence of such an economic phenomenon in agricultural production activities: in the year of harvest, the farmers' income decreases, which is vividly summarized as "grain cheapness hurts farmers" in China's folk.

It is a classic problem of economics that the grain is cheap and hurts the peasants. The traditional view is that the profit that farmers get from ** grain depends on two factors: output (q) and grain price (p), and profit is the product of the two; But these two variables are not independent, but interrelated, and their correlation is determined by a downward sloping line of demand for food, and the two are negatively correlated.

In addition, the food demand line lacks elasticity, that is, the demand is not very sensitive to changes in **. When the price of food is **, the demand for food increases, but not by much. The basic truth lies in the fact that food is a necessity, and the demand for food is mainly determined by the physiological demand for food.

However, there are also differing views in the economics community.

When the grain obtains, the relationship between supply and demand changes greatly, and the relative relationship between supply and demand (supply and demand) is different than before, the increase in supply is greater than the increase in demand, and the decline in grain is greater than the increase in demand (increase in sales), so the profits of grain farmers decline.

After understanding this characteristic of the grain market, it is not difficult to understand the following phenomenon: When grain production increases by a large margin, peasants can only compete to reduce prices in order to sell the grain in their hands. However, due to the lack of elasticity of grain demand, farmers can only sell their grain after a significant reduction in grain prices, which means that grain prices are often large when grain is harvested.

If the percentage of grain prices exceeds the percentage increase in grain production, there will be a situation in which the increase in output does not increase or even decreases the income.

Explain it with economic principles: agricultural products are often commodities that lack the elasticity of demand. "Grain cheap" refers to the increase in production in a bumper harvest year, but the demand remains unchanged, resulting in a decline in grain**; "Hurting farmers" means that the increase in income is not enough to make up for the decrease in income caused by the decline in income, and the result is that the total income of farmers not only cannot increase but declines, that is, the elasticity is small and the output is not increased.

Extended information: From the perspective of economics, the main role of consumers is mainly reflected in the social (consumption) demand determines the supply level of commodities, and more deeply determines the exchange value of commodities. According to the principle of economics, consumer demand determines the level of supply, and what kind of demand level there is, what kind of product production and commodity supply.

Marx called the material property of commodities, which can satisfy people's certain needs, "usefulness", which makes commodities have use value.

If the thing is useless, then the labor contained in it is useless, cannot be called labor, and therefore cannot form value. Whether a commodity is useful or not, that is, whether it has use value, depends entirely on external social needs. So some economists say:

Labor creates the value of the commodity, but the exchange value of the commodity is determined not by the quantity of labor, but by the needs of society (Marx's view)". Therefore, the ancients said: "Rare things are precious".

In a bumper year, the peasants' incomes have decreased. The fundamental reason for this phenomenon lies in the fact that agricultural products are often commodities that lack elasticity of demand, and because the decline in the equilibrium of agricultural products is greater than the increase in the equilibrium quantity of agricultural products, the total income of peasants decreases.

Grain is a necessity, and the elasticity of demand is less than 1, so producers' returns change in the same direction as **, and the supply of grain is bumper and the supply increases, and the income also decreases.