Cobweb Model for the Stabilization of Vegetable Prices in Some Selected Villages of Noakhali District

Binata Rani Sen, Md. Maznur Rahman and Mohammad Iqbal Hossain

International Journal of Science and Business, 2018, vol. 2, issue 4, 707-717

Abstract: In this paper, a linear Cobweb model is used to analyze the phenomenon of commodity price fluctuations of vegetables in some selected villages of Noakhali district. The fluctuation of vegetable prices is normal in the market economy. The level of the price and the fluctuation not only has a significant influence on farmers and consumers, but a reasonable and stable price also has an irreplaceable effect on the safe running of the vegetable market. The assumptions for the model are (i) vegetables have no equal substitutes; (ii) there is no foreign competition. The analysis found that the slope of the demand function of the price was smaller/larger than the slope of the supply function of the price which means that the price and quantity supplied of the fresh vegetables would oscillate/indicate around a fixed price and also spiral inward/outward.

Keywords: Vegetable Prices; Cobweb Model; Price Fluctuation; Market economy; Noakhali district (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:aif:journl:v:2:y:2018:i:4:p:707-717

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