Demand Of Sugar Essay

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ntroduction
Sugar, a sweet substance produced mainly from sugar cane and sugar beet. It is one of the world's favourite and most used natural sweetener. Sugar is used in many different ways such as giving more flavour to our tea, coffee or simply in the process of baking. The sugar industries produce several types of sugar a few of which are white, brown and raw sugar. According to the case study, the sugar price is increasing due to some factors. Brazil, the first worldwide producer, India the second producer and the largest consumer of sugar are behind this increase. However the rising price of sugar does not happen naturally. It is a consequence of several factors which in this case are the demand and supply of sugar. This report consists of the identification of the factors that are important in determining the demand and supply of sugar and analysing the reasons of the increase of the sugar price in 2009 and the elasticity of sugar.
Demand
Demand is generally referred to how much ( the quantity) of a product is desired by the buyers and how much they are able to purchase and quantity demanded is the demand at a particular price that people are willing to buy. There is a bidirectional relationship between them, meaning that when the quantity demanded increase, demand also increase and vice versa. The graph below explain this relationship.
Graph 1: Demand
This graph is called the demand curve. As you can see, when the price of the good is at £0. 20, there is more demand of the buyers (above 400) and this is due because of the low price of the good. However comparing it when the price is £0.50, there is less demand from the buyers (100). From this demand curve, it can be concluded that the lower the price, the more the demand...

... middle of paper ...

...ice of quantity. Equilibrium is mostly defined as when the supply and demand curves intersect at a point. It is when the quantity demanded and quantity supplied are equal. It might have a small effect on it but not a major because using the demand and supply law, producers mostly supply a good according to the price and demand. The graph below explains it.
Graph 4: equilibrium

On this graph you can see that when the price is $2.00 which is called the equilibrium price, and the quantity supply is 7 which is called the equilibrium quantity, both curve intersect at a single point meaning that they are equal and this is the equilibrium.
In conclusion, this report was to evaluate some of the factors in determining the supply and demand of sugar, some of the reasons why the sugar price increased in 2009 and the elasticity of the supply and demand of sugar.

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