The Economics on Wheat

Business Economics

the economics on wheat

Table of content 1

Introduction 2

Part I: Economic factors determining the price of wheat. 2

Cost of production 2

Demand and supply 2

Elasticity 4

Market Structure 5

Part II: How Heineken brewers can pass on the recent increase of wheat prices

to their customers. 6

Consumer surplus and marginal benefit 6

Price discrimination 6

Introduction

In de first part of this paper I will be going into the main economic factors that determine the price of wheat by describing the mean features of the market mechanism: costs of production, demand and supply, market structure and elasticity.

In the second part of this paper I will focus on how the Heineken brewers can pass on the recent increase of wheat prices to their customers.

Part I: Economic factors determining the price of wheat.

Costs of production

Costs of production (with production factors being land, labour, capital and enterprise) are important to a firm because it is one of the factors determining the price at which