SRJC_H2_ECONS_9757_Q1_MS

Q1. Organic food such as fresh fruits, vegetables and dairy products is grown without synthetic pesticides, chemical fertilizer s or genetically modified seeds. 2015 was a year of significant growth for the organic food industry despite the continued struggle to meet the seemingly unquenchable consumer demand. There was also an increase in the number of farmers converting to organic farming over time. Source: Organic Trade Association Discuss the demand and supply factors that determine the output of organic food and evaluate which is the most important factor. [25] Introduction In the farming industry, organic produce has become such an appetite for consumers to the point where the demand cannot be met due to a huge shortage of growers. Producers have responded to this growing demand by making the transition to certified organic food production. Definition: Market equilibrium occurs when buyers and sellers come together and exchange at a mutually agreeable price and quantity. When the market is in equilibrium, there is no tendency for the price or the quantity exchanged (that is, the quantity bought and sold) to change as quantity demanded equals to the quantity supplied. Demand and supply in the free market will determine the equilibrium output. Hence, changes in the demand and supply will impact the market equilibrium. Direction: The factors which determine the output of organic food are technological advancements and economies of scale which affect supply as well as factors such as tastes and preferences, and income level that influence demand. Body Selecting food is one of the most common activities that consumers pursue many times each day. But this selection requires taking into account different factors (e.g. price and taste) and may involve a complicated decision-making process in order to satisfy these different factors. P1: Although the organic food sector comprises only a small percent of all food sales, the perceived environmental and health benefits of organic food have received increasing recognition and broader acceptance among consumers, hence a shift of taste and preference from inorganic food to organic food. As the technology advances, people have easier and more convenient access to Internet and social media to find out more informati on about the enhanced health benefits of consuming organic food. Furthermore, since society has been adopting health-conscious eating habits and government has been promoting healthy lifes tyle, the demand for organic food has only been steadily growing. In the minds of consumers, this trend of “eat good, feel good, look good” is convincing and rapidly growing as it has greatly contributed to why the majority of consumers are choosing organic. Environmentally conscious consumers are willing to pay a much higher price for sustainable products such as organic and locally-produced foods as ethical considerations are becoming important fa ctors in