0
Merchants try to manipulate the price of commodities by controlling the amount available for sale. Sometimes it works and sometimes it does not. When Brazil grew most of the world's coffee, they could control the price by only selling it when it would fetch a certain price. At that point, a number of nations in Africa started growing coffee. At that point, the price of coffee collapsed. It is possible to manipulate commodity prices in the short run but not in the long run.
In a short time, the large sugar cane fields of Florida could be harvested and turned into rice paddies.
Besides controlling the amount they are willing to sell, price manipulation can be the result of direct collusion between merchants: that is, regardless of how much is being sold, merchants could agree that they would never charge less than some price $X for the good. This type of collusion is usually done through cartels or trusts, but, particularly in the medieval times, was a practice of guilds and mercantile associations. It also can happen today when a market has a very few merchants (2-4 at most), and they come to an "unofficial" agreement around pricing.
Additionally, merchants and/or nations can manipulate or control prices by tariffs and import quotas. From the times of mercantilism, colonial powers used this system to embellish the economies of the home nation at the expense of the colonies they controlled. Rarely did the Power be in the business of growing cotton for example, however, the merchants that were were part of this self contained profit system with the control of prices in collusion with their governments.
Merchants can also control prices and commodities by means of monopolies that are created by governments. Reference to this is mentioned earlier by the first contributor.
Wiki User
∙ 9y ago
Add your answer:
Earn +20 pts
Does the price of commodities remain unchanged during the change in demand of those commodities?
Almost certainly not.
What is the bid an ask price in commodities?
"Ask" is the price sellers are asking for their commodity. "Bid" is the price buyers are willing to pay.
How does the government inform and protect consumers?
the government can reduce the taxes on the commodities, it can also use price control that is price cealing
Commodity brokers use forward and futures contracts for which of the following reasons?
The seasonal nature of many commodities would lead to wide variations in supply and price without these contracts.The seasonal nature of many commodities would lead to wide variations in supply and price without these contracts.The seasonal nature of many commodities would lead to wide variations in supply and price without these contracts.(Apex)Rebecka Reyes was here :Dmyspace.com/darkemo14
What happens to the equilibrium price when supply goes down?
When supply goes down the equilibrium price tend also to fallcausing the price of commodities to fall and hence shortage of goods and services to the economy.
What is a commodity index used for?
A commodity index is something that tracks the price of different commodities. It often uses the average price of commodities, and is designed to encompass all types of commodities such as petrol and metals.
Does the price of commodities remain unchanged during the change in demand of those commodities?
Almost certainly not.
What is price of commodities?
The price of a commodity simply means the price of goods/stock/items.
What is the bid an ask price in commodities?
"Ask" is the price sellers are asking for their commodity. "Bid" is the price buyers are willing to pay.
Why does meat very in price?
Supply and demand, like most other commodities.
How does the government inform and protect consumers?
the government can reduce the taxes on the commodities, it can also use price control that is price cealing
What is praise rise in essential commodities?
because if the price of the commodity increase then the demand will decrease
Why price tag is important?
Price Tag is important because since the 1880's almost all the merchants, shops are cheaters Johnny Wanamaker the maker of the Price Tag eventually realize that without Price Tag the shops or merchants would still do the cheating style.
What is the price of silver on April 19 2008?
Silver was $17.68 an ounce, according to Engelhard Commodities.
Who determines the pricing of oil commodities?
Commodity traders determine the pricing of oil commodities. They bid on future contract, which are basically agreements to buy or sell oil at a certain date in the future for a price.
Why does elasticity of demand differ from other commodities?
Because it doest not relate to consumers its effects on change in price
Commodity brokers use forward and futures contracts for what reasons?
The seasonal nature of many commodities would lead to wide variation in supply and price without these contracts.
