Price Elasticity of Demand

Rationality will be the guiding principle for both the consumers and the producers in making economic decisions.This paper tries to examine the factors related to changes in the price of beef and the behaviours of both consumers and suppliers of beef towards it. In analyzing price elasticity of the demand and supply of beef, discussions on market price, determinants of price elasticity of demand and supply were also made. Related articles on demand and supply of food and grains like corn are utilized to achieve the goal of producing an intelligent analysis of the issues reflected in the article. And for better understanding of some of these economic concepts, illustrated graphs were also used to help in serving the purpose.One of the economic goals that are wide, if not accepted in our society and in many others is the price level stability (McConnell and Brue 1993). This goal aims to avoid the sizable upswings or downswings in the general price level. In a microeconomic perspective, this goal is reached when changes in the market prices are manageable and don’t hurt consumers and producers that much. As price is the quantity of money paid by the buyers or consumers and received by the sellers or producers for a unit of good or service, it is very important for it to be stable. We need to analyze market prices to extend our understanding of demand and supply and to see the relative efficiency of these in allocating resources.A rise or fall in market prices will have a corresponding effect or impact on the people in the economy. In the article, the rise in beef price inflicted by high corn prices, more exports to protein-hungry nations and the market forces of supply and demand, is causing a pain being felt by beef lovers nationwide. But since some customers like Beth Belling from Omaha are a carnivore, they have to have their beef even if hurts them a little more.