In the example of buying and selling of guavas, imagine that the seller is getting a good price, and is able to make Class 7

In the example of buying and selling of guavas, imagine that the seller is getting a good price, and is able to make Class 7

In the example of buying and selling of guavas, imagine that the seller is getting a good price, and is able to make a profit. He will try to get more guavas from farmers to be able to sell them at the same price and increase his earnings. What is the farmer likely to do in this kind of a situation? Do you think he will start thinking about the demand for guavas in the next season? What is likely to be his response? Class 7

Answer:

In the situation where the seller is making a good profit from selling guavas and there is also good demand in the market, he will increase the prices of rest of guavas. Farmer may think about how much demand there will be for guavas in the next season. Yes, farmer might plant more guava trees or take better care of his current trees to ensure a larger harvest.

By doing this, he aims to take advantage of the good prices and maximise his earnings too. Farmers often consider market demand when planning their crops, as it helps them make informed decisions about what to grow and how much to produce. If they anticipate high demand, they will likely increase their supply to meet that demand, hoping to earn more profits.