APPLE IN BANGLADESH

The proverb "An apple a day keeps the doctor away." addressing the health effects of the fruit, dates from 19th century Wales. Research suggests that apples may reduce the risk of colon cancer, prostate cancer and lung cancer. Compared to many other fruits and vegetables, apples contain relatively low amounts of vitamin C, but are a rich source of other antioxidant compounds. Apple's antioxidant property prevents the damage to cells and tissues. The fiber content, while less than in most other fruits, helps regulate bowel movements and may thus reduce the risk of colon cancer. They may also help with heart disease, weight loss, and controlling cholesterol. The fiber contained in apples reduces cholesterol by preventing re-absorption, and (like most fruits and vegetables) they are bulky for their caloric content. About 69 million tonnes of apples were grown worldwide in 2010, and China produced almost half of this total. The United States is the second-leading producer, with more than 6% of world production. The largest exporters of apples in 2009 were China, the U.S., Poland, Italy, Chile, and France while the biggest importers in the same year were Russia, Germany, the UK and the Netherlands. The apple tree was perhaps the earliest tree to be cultivated and its fruits have been improved through selection over thousands of years. Alexander the Great is credited with finding dwarfed apples in Kazakhstan in Asia in 328 BCE; those he brought back to Macedonia might have been the progenitors of dwarfing root stocks. Winter apples, picked in late autumn and stored just above freezing, have been an important food in Asia and Europe for millennia, as well as in Argentina and in the United States since the arrival of Europeans. Apples were brought to North America with colonists in the 17th century and the first apple orchard on the North American continent was planted in Boston by Reverend William Blaxton in 1625. The only apples native to North America are crab apples, which were once called "common apples". Apple varieties brought as seed from Europe were spread along Native American trade routes, as well as being cultivated on Colonial farms. An 1845 United States apples nursery catalogue sold 350 of the "best" varieties, showing the proliferation of new North American varieties by the early 19th century. In the 20th century, irrigation projects in Washington State began and allowed the development of the multibillion dollar fruit industry, of which the apple is the leading species. Bangladesh abounds with a large variety of tropical and sub-tropical fruits. The most widely cultivated fruits are mango, jackfruit, black berry, pineapple, Banana, litchi, lemon, guava, custard apple, wood apple, elephant apple, golden apple, Indian berry, PAPAYA, tamarind, melon, watermelon, cashew nut, pomegranate, palmyra, plum, rose apple, Indian olive, and Indian jujube. There are many minor edible fruits that are locally available in the wild and are also cultivated, such as latkan, monkey jack, uriam, rattan, river ebony, garcinia, water coconut, wild date palm, etc. May, June and July are specially treated as fruit festival months in Bangladesh when almost all the major and minor fruits are matured and available. A few fruits are available throughout the year. These are the papaya, sapodilla, coconut and banana. The common imported fruits are orange, apple, pomegranate, grape, date, and mandarin.

DEMAND CURVE OF APPLE

Definition of demand curve: A consumer desire and willingness to pay a price
for a specific good or service, holding all other factors constant, the price of a good or service increases as its demand increases and vice versa. Demand as willingness to go out to buy a certain product and market demand is the total of what everybody in the market wants. The curve showing relationship between price and quantity demanded is called demand curve. Here we consider the apple as our example of demand. Demand will be determined by 5 factors : o o o o o Own price Cross price Number of buyers Income of buyers Taste

Law of demand: Law of demand implies that if price increase demand decrease
and if price decrease demand will be increased that means a negative relationship exists between price and quantity demanded.

Demand curve of Apple:

Demand for a particular product or service represents how much people are willing to purchase at various prices. Thus, demand is a relationship between price and quantity, with all other factors remaining constant. Demand is represented graphically as a downward sloping curve with price on the vertical axis and quantity on the horizontal axis. Price in Taka 130 120 110

Quantity in Kg 40 45 50

130 120 110 Price Quantity 40 45 50

Figure 1: Demand Curve

Substitute Good:

A pair of good is substitute to one another if the increase in the price of one leads to increase in quantity demanded of others. Here consumers purchase orange when the price of apple is increased so orange is substitute of apple.

SUPPLY CURVE OF APPLE

Definition of supply curve: The total amount of a specific good or service that
is available to consumers. This relates closely to the demand for a good or service at a specific price; other things held constant, the supply provided by producers will rise if the price rises because all firms look to maximize profits. Each specific good or service will have its own supply and demand patterns based on price, utility and personal preference. If people demand a good and are willing to pay more for it, producers will add to the supply. As the supply increases, the price will fall given the same level of demand. Ideally, markets will reach a point of equilibrium where the supply equals the demand for a given price point; at this point, consumer utility and producer profits are maximized. Supply will be determined by 4 factors: o o o o Own price Input price Number of sellers Technology

Law of Supply: Supply characteristics relate to the behavior of firms in producing

and selling a product or service. There are some factors affecting supply will help with the development of supply expectations and the impact upon market price. Price in Taka 130 120 110

Quantity in Kg 400 800 1200

130 120 110 Price Quantity Figure 1: Supply Curve The supply describes the behavior of producers. The market or total supply represents the quantities producers are willing to sell over a range of prices for any given time period. At the individual level, willing to produce a given product as long as the market price is equal to or greater than the cost of producing that product. Market supply is represented by an upward sloping curve with price on the vertical axis and quantity on the horizontal axis.

400

800

1200

MARKET EQUILIBRIUM OF APPLE

In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change. It is the point at which quantity demanded and quantities supplied are equal. Market equilibrium, for example, refers to a condition where a market price is established through competition such that the amount of goods or services sought by buyers is equal to the amount of goods or services produced by sellers. This price is often called the equilibrium price or market clearing price and will tend not to change unless demand or supply changes. Price in Taka 130 120 110

Quantity in Kg 40 45 50

Quantity in Kg 400 800 1200

Price Price Supply 130 120 110 Supply

Demand 800 Quantity Figure 3: Equilibrium

Demand

Quantity

PRICE ELASTICITY OF DEMAND

Price in Taka 130 120 110 Price Elasticity in Demand = = = 150%

Quantity in Kg 40 45 50

INCOME ELASTICITY OF DEMAND

Income in Taka 500 800 1000 Income Elasticity in Demand = = = 20.83%

Quantity in Kg 40 45 50

LAW OF DIMININISHINGING MARGINAL UTILITY

Law of diminishing marginal utility implies that with more consumption of good utility turns to less. Marginal utility implies satisfaction for additional utility consumed. For example, when a hungry individual consumed 1 plate of rice get highest level of satisfaction but it turns to less with more plate consumption.

BUDGET LINE
A line showing the various combination of two goods that a consumer can purchase by spending all income at a given prices of two goods. For example, an individual consumed orange and apple spending all his income, his income is 10000, so 10000/120= 84 kg of apple he can consumed by Spending all his income, same would happen in case of orange 10000/100=100 kg. The connecting line is two Quantity Budget line.

Apple

Orange Figure 4: Budget Line

INDIFFERENCE CURVE
The curve showing the various combinations of two goods that give a consumer equal satisfaction and among which consumers are indifferent. Every point of indifference curve implies same level of satisfaction. Here the indifference curve C shows the same level of satisfaction.

P 84

42

60

100

Figure 6: Indifference Curve

Optimum level of consumption is the tangent point where indifference curve cut the budget line. Here the tangent point C is the optimum level of consumption and consumer is indifferent to consume at that point.

Income effect and substitution effect

A consumer consumed sorna and minicate rice in a budget line and indifference curve. Keeping all things remain constant price of minicate decrease so consumer increase the consumption of minicate with a new budget line and indifference curve and achieve new satisfaction level. But if he wants to stay in same indifference curve with same satisfaction levels then he create a new budget line.

P J

J *

A C

U1 K
Substitution Effects

U2 Q

K*

K"

Income Effect

Income effect=B-C Substitution effect=C-B

Concluding Remark:
This study has shows the nature of market after investing the apple market. Despite a relatively good performance in the last decade, the economy is beset with many structural weaknesses, which the government has yet to address. Chief among these weaknesses are the undercapitalized financial sector, an unproductive and chronically money losing public sector, poor infrastructure, lack of export diversification, and pervasive corruption at all levels of society. The failure of the political system to address these long-standing economic problems has adversely affected the business environment and investment climate. Thus, in order for rice surplus regional markets to be better integrated with deficit regions, the government should create a better opportunity to make the market easier for both businessman and consumer.

REFFERENCE:
Alexander, C. and Wyeth, J. (1994). Co-Integration and MarketIntegration: Application to the Indonesian Rice Market. Journal ofDevelopment Studies, 30(2), 303-328. Barrett, C.B. (1996). Market Analysis Methods: Are our Enriched ToolkitsWell Suited to Enlivened Markets? American Journal of AgriculturalEconomics, 78(3), 825-829. Baulch, B. (1997). Transfer Costs, Spatial Arbitrage and Testing FoodMarket Integration. American Journal of Agricultural Economics,79(2), 477-487. Baulch, R., Das, J., Jain, W. M. H., Farid, N. and, Zohir S. (1998). TheSpatial Integration and Pricing Efficiency of the Private Sector Grain Trade in Bangladesh. Phase I and II report. BangladeshInstitute of Development Studies. Bangladesh Agricultural University and University of Sussex.