Lesson Notes By Weeks and Term v4 - SHS 2

Lesson Video

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Performance objectives

• Identify factors that influence demand for agricultural goods.
• Identify factors that influence supply of agricultural goods.
• Analyze how changes in demand and supply affect market prices.

Lesson summary

This lesson explores the fundamental economic principles of demand and supply as they apply to agriculture. We will investigate why the prices of agricultural goods like tomatoes, maize, and plantain change so frequently in our local markets. Understanding these forces is crucial for everyone, from the farmer deciding what to plant, to the consumer planning their family's meals, and the government creating policies for food security. By the end of this lesson, you will be able to explain the "invisible hands" that control the prices and availability of the food we eat every day in Ghana.

Lesson notes

This lesson is built around two key ideas: Demand and Supply. A. Demand for Agricultural Commodities

Definition: Demand refers to the quantity of a commodity that consumers are willing and able to buy at a given price over a specific period. Willing: The consumer wants the item (e.g., you want to eat waakye). Able: The consumer has the money to buy it (e.g., you have GHS 10 for the waakye).

The Law of Demand: This is a simple but powerful rule. It states that, *all other things being equal (ceteris paribus)*, the higher the price of a commodity, the lower the quantity demanded, and vice versa. Example: If the price of a ball of kenkey increases from GHS 2 to GHS 4, fewer people will buy it. If the price drops to GHS 1, more people will likely buy it. Factors Influencing Demand

These are the "other things" that can change demand, even if the price stays the same. When these factors change, the entire demand curve shifts. Price of the Commodity Itself: This is the most direct factor, as explained by the Law of Demand. It causes a *movement along* the demand curve. Price of Related Goods: Substitutes: These are goods that can be used in place of each other. If the price of a substitute good increases, the demand for the original good will increase. Ghanaian Example: If the price of yam increases significantly, many families may switch to buying more plantain or cocoyam. Therefore, the demand for plantain and cocoyam will rise. Complements: These are goods that are used together. If the price of a complementary good increases, the demand for the original good will decrease. Ghanaian Example: Bread and margarine. If the price of margarine becomes very high, some people might buy less bread because they enjoy eating them together. Consumer's Income: How much money people have greatly affects what they can buy. Normal Goods: For most goods (like fresh chicken, milk, eggs), as income increases, demand increases. Inferior Goods: For some goods (like *gari* or *koobi* - salted tilapia), as income increases, people may buy less of them, preferring more expensive alternatives. Ghanaian Example: A student who gets a well-paying job might reduce their intake of *gari* and soakings and start buying more expensive cereals. Consumer's Tastes and Preferences: What people like and prefer changes over time due to health awareness, advertising, or trends. Ghanaian Example: Recent health campaigns promoting the benefits of local vegetables like *kontomire* and *ayoyo* have increased their demand, even if their prices haven't changed. Expectations of Future Prices: If consumers expect the price of a commodity to rise in the future, they will buy more of it now. Ghanaian Example: Around November, people often buy and store bags of rice and gallons of cooking oil in anticipation of price hikes during the Christmas season. This increases the current demand. Population / Number of Buyers: An increase in the population of an area leads to an increase in the overall demand for food. Ghanaian Example: The growing population of Accra and Kumasi has led to a constantly increasing demand for food items like maize, cassava, and vegetables in those cities. Festivals and Seasons: Cultural and religious events create a huge, temporary increase in demand for specific products. Ghanaian Example: During the Homowo festival, the demand for maize and palm oil skyrockets in Ga communities. Similarly, the demand for goats and sheep increases dramatically across the country before the Eid-al-Adha festival. B. Supply of Agricultural Commodities

Evaluation guide

• Discuss the f actors that influence demand and supply of Agricultural
• commodity.
• Inquiry -based learning:
• Learners in a mixed -gender group surf the internet for information on the