Garlic prices soar in China THE price of garlic has shot up 40-fold this year in China, the world's largest producer of the plant, in part due to an unexpected factor - a popular belief that it can help ward off swine flu. The soaring prices have created a new breed of millionaire, as businessmen and savvy speculators cash in big on the newfound demand for the pungent bulbs. 'Now speculators have rushed in to buy up garlic by the truckload because the garlic market is relatively small and easy to manipulate.' Last month, the wholesale price of garlic in eastern Shandong province - the country's garlic-producing heartland - rose to nine yuan per kg (S$1.83), from 0.2 yuan a year earlier, state Xinhua news agency reported this week. 1. Using the characteristics of perfect competition, explain why are garlic producers price-takers. 2. Illustrate how a perfectly competitive fim is a price taker adopting the market's selling price of garlic.

Garlic prices soar in China THE price of garlic has shot up 40-fold this year in China, the world's largest producer of the plant, in part due to an unexpected factor - a popular belief that it can help ward off swine flu. The soaring prices have created a new breed of millionaire, as businessmen and savvy speculators cash in big on the newfound demand for the pungent bulbs. 'Now speculators have rushed in to buy up garlic by the truckload because the garlic market is relatively small and easy to manipulate.' Last month, the wholesale price of garlic in eastern Shandong province - the country's garlic-producing heartland - rose to nine yuan per kg (S$1.83), from 0.2 yuan a year earlier, state Xinhua news agency reported this week. 1. Using the characteristics of perfect competition, explain why are garlic producers price-takers. 2. Illustrate how a perfectly competitive fim is a price taker adopting the market's selling price of garlic.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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