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Illustrate the implications of agricultural price instability problem for Less Developed Countries?
Implications of agricultural price instability problem for LDCs:
a. Agricultural products are issue to price volatility through uncertain harvests. When supply increases through growth, then price falls by a greater proportion decreasing producer incomes.
b. Cartels have been unproductive in maintaining price by limiting output.
c. Producers obtain a few pence for each pound spent into western coffee shops. Developed countries keep most of the value added.
Assume the firms cost function is: C(Q)= 100+10Q+Q^2 , Determine whether this industry is a natural monopoly when the demand function is: 1) D(P)= 100-3P 2) D(P)= 90-3P 3) D(P)= 10
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