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How would we model price volatility using a supply

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Reference no: EM131626005

Read "How to tackle price and income volatility for farmers? An overview of international agricultural policies and instruments" sections 1 - 3 and 4b.

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  1. How would we model price volatility using a supply and demand graph? Explain and use a graph as necessary.
  2. If you're a California farmer and you invest in drought-resistant crops (and assume all of your fellow farmers do too), how does this impact the market you modeled in Q1?
  3. In section 4b, the article mentions "fixed direct payments" (paragraph 1) as support for the farmers. In the model that we've learned, how would we characterize these payments? How would we model them?
  4. Also in section 4b (paragraph 3), the article states that the fixed direct payments were replaced with two other programs. If you were a farmer in the US, how does this change affect your business? Would you have been for or against the change?

Reference no: EM131626005

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