Ag%20I%20Class%20

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Ag I Class records unit

• Marketing

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What is Marketing?

• All the economic activities involved in preparing
  and positioning the product for the final consumer

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What is Utility?

• Customer satisfaction
• consumer needs

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Form Utility

• In what form is a product available
• Whole chicken
• Chicken parts
• Cooked chicken
• Each step adds value

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Time Utility

• When is a product available

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What percentage of the final product does the
producer receive?

• Dairy farmer 3 to 4 for milk
• Grain products 9

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What is the Law of Demand?

• At any point in time, the rational consumer will
  take more only at a lower price.
• Ex How many hamburgers would you buy at 2?
• How many hamburgers would you buy at 1?
• How many hamburgers would you buy at 50 cents?
• How many hamburgers would you buy at 25 cents?

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Law of Demand
Price
Demand
Quantity
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What is the Law of Supply?

• Producers are willing to offer more only at a
  higher price
• Ex How many pounds of jerky will you make if
  jerky is selling for 1 / lb.?
• How many pounds of jerky will you make if jerky
  is selling for 1.50 / lb.?
• How many pounds of jerky will you make if jerky
  is selling for 2 / lb.?

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Law of Supply
Supply
Price
Quantity
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Law of Supply Demand
Supply
Price
Demand
Quantity
12
What is Equilibrium Price?

• Price is determined where supply and demand
  curves intersect

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Law of Supply Demand
Supply
Price
Demand
Quantity
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What is Price Discovery?

• The process of searching for the Equilibrium
  Price
• Many things involved that can alter supply and
  demand
• Government incentives
• economy
• World Trade
• Surplus

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How does change in supply affect price, if demand
stays the same?
Supply 1
Price
Supply 2
Demand
Quantity
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Economies of Size

• Within Limits, larger businesses can produce at a
  cheaper cost per unit of production
• Eventually, as business becomes too large, costs
  increase