SUMMARY

Dr Safdar Mohammed, UEAU chair of agribusiness and contributor to the study of organic
food believes that the trend began years ago, and states that consumers are gradually
becoming more health concious and are willing to pay higher prices for certified organic
food. His study stated that larger households and (Emiratis), compared to non-Emiratis are
more willing to pay for organic food because immigrants are usually low-paid workers and
have insuffcient knowledge and resources to consume organic food. Besides that, it has been
found that the demand for organic food is gradually growing and the organic food market is
estimated to be worth around US$1.5 billion dollars by the year 2018. Development of
specialist retail offerings such as stand-alone shops and expanded sections in leading retailers
and supermarkets also played in a role in increasingthe availability of organic produce.
Lastly, another factor that influences the growth of the organic food market is the high levels
of disposable income for some residents in GSC. High disposable income usually translates
into increased demands for higher quality fresh and organic produce for a healthy
lifestyle.Moreover, The growth is not expected as last the few year at around UAE because
the production is still lacking,the blame is on the producers of organic farming
systems.Lastly,increases with age as they become more health conscious the consumer are
willing to spend the money on higher prices for certified organic food.

Elasticity
A measurement of a variable's affectability to a change in another variable. In financial
aspects, flexibility alludes the extent to which people (buyers/makers) change their
interest/sum supplied in light of value or salary changes. If price elastic demand more than
one it means that the product is elastic. For example, a 10% increase in price that results in a
greater than 10% decrease in quantity demanded shows that the product is elastic and
quantity demanded will easily be affected by the change in price of the product. Besides, if a
products price elastic demand is not more than one means that it is inelastic. For example, if
the price elasticity of a product is close to zero, it is indicating that quantity demanded
changes little in response to a price change. Moreover, according to the article that states that
organic food is inelastic, it means the demand for organic food is high but its price will not
affect the consumers purchasing power and also the demand also will shift to the right. The
article also did mention that even the larger households and Emiratis are also more willing to
pay for organic food with no regards to the change in price of the products.

Market Structure
Market structure is best to describe as the authoritative and different attributes of a business
sector. It concentrate on those characterized which influence the way of rivalry and
valuing .Besides, it is also important not to place an excess of accentuation essentially
available offer of the current firms in an industry. There are four type of Market structure,
which is perfect competition, monopolistic competition, oligopoly and monopoly. Perfect
competition is a market structure where all firms sell the identical product, The market price
of the product couldnt not be control because all firms are price taker. The ease of entry for
perfect competition is high where other new firm could easily participate in this market
structure. The example industries of perfect competition is agriculture like growing wheat and
growing apples .Besides,monopolistic competition is also one of the type of market culture .
There are many firm involved in this market structure but the product that they sell is
different. The example industries for monopolistic is clothing stores and restaurants. The ease
of entry for monopolistic competition is high. It means is easy for others new firm to
participate in this market because the cost of opening this industries is lower and easier
compare to others industries. Furthermore, Oligopoly Is a type of market under market
structure, the number of firm who participate in this market is less. The product in this market
is identical or differentiated . The examples of industries would be manufactured type of
business like manufacturing computers and manufacturing automobiles. The ease of entry in
this market is low because its hard to be manufactured compare to other business. Lastly,
Monopoly is also of the important type of market in market structure,there are only one firm
could be participate in this firm. The firm has it own unique product where the product can
only produce by them. The examples of industries of this market are first-class mail delivery
and tap water. The ease of entry of this company is blocked by the government which mean
no firm could enter this market.

Market Equilibrium
A situation of where the supply of an item is exactly equal to its demand. Since there is
neither surplus nor shortage in the market, price tends to remain stable in this situation.
Demand increases or decrease will be affected by several reasons. One of the reason lead
demand curve shift to the right is Income increase. Income increase will lead consumer be
able to afford more goods. For example, Consumer A with three thousand income he could
only afford a Nike shoes , the next month his income increases to four thousand per month,
he could get another pair of Nike shoes . Besides Increases Quality of goods is also one of the
reason will lead demand curve shift to the right. high income consumer will prefer better
quality than normal goods. For example, Organic food and normal food, consumer who can
afford will choose organic food compare to normal food. According to the article, demand of
organic food increased ,one of the reason is some of the resident of GCC are high level of
disposable income and their wants is different to others, they will want good which is high
quality ,organic and fresh. Besides, the availability of organic produce and the development
of specialist retail offering also lead the demand shift to the right. When organic food can get
found in everywhere and this cause consumer will tend to get organic food instead of normal
food because its more convenient for them.Moreover,Consumer behavior and trend could be
one of the factor of demand curve shift to the right. As what to the article stated, The trend of
organic food will be more preferable goods for household and emiratis (citizen of America).
A majority of consumer said that they are concern about chemicals used in food production
and this could be where consumer behavior take part in leading demand curve shift to the
right.

Demand of Organic Food Increases

Based on the diagram above,when the price of organic food increases from P1 to P2 , the
quantity demanded of organic food for cocoa also increases from Q1 to Q2 .The demand
curve also has shift to the right from D to D1 . The demand of organic increases is because
the factor of increses of income,increases quality of goods, the availability of organic
produce and the development of specialist retail offering,consumer behavior and trend .

Supply Curve For Organic Food

The article stated , the production is lacking due the producers of organic farming system.The
diagram has show the producers of organic farming system lead to supply decrease.The price
of the product increase from p1 to p2. The equilibrium quantity supplied for organic food fall
from Q to Q1 and the prices of organic food will rise.The supply curve will shifr to left from
S to S1.

p
Inelastic demand for organic food
The article have show that the demand for organic food is inelastic.When the price of organic
food increases the consumer is still willing to buy . When the price of of organic food rise
from p1 to p2 ,it can be see that the quantity demanded only decrease a little which from Q1
to Q2 .