Resource Book on Horticulture Nursery Management

7.2 Content
7.2.1 Demand and Supply Analysis of Nursery Plants
Demand and supply of the nursery plants is an economic model of price
determination of the plants for sale. It concludes that in a competitive market, the unit
price for a particular plant will vary until it settles at a point where the quantity demanded
by consumers will equal the quantity supplied by producers, resulting in an economic
equilibrium of price and quantity. The demand and supply of the plants are governed by
the following laws,
1. If demand increases and supply remains unchanged it leads to higher equilibrium
price and quantity.
2. If demand decreases and supply remains unchanged, it leads to lower equilibrium
price and quantity.
3. If supply increases and demand remains unchanged, it leads to lower equilibrium
price and higher quantity.
4. If supply decreases and demand remains unchanged, it leads to higher price and
lower quantity.
The supply-demand model is a partial equilibrium model representing the
determination of the price of a particular good and the quantity of that good. The supply
demand model of the nursery plants are represented by the Supply Curve and the Demand
Curve.
The Supply Schedule is affected by the following factors:
1. Production costs
2. The technology used in production
3. The price of related goods
4. Firm's expectations about future prices
5. Number of suppliers
The demand is affected by the following factors:
1. Income
2. Tastes and preferences
3. Prices of related goods and services
4. Buyer's expectations about future prices
5. Number of buyers
D1 is the demand of a certain nursery plant at a certain time. The demand for the plant
increases to D2 and the consumers pay an increased price for the similar quantities. The
supply curve depicts that increasing supply but reducing demand can lower the price of a
certain commodity. While decreased supply during a steady demand can also increase the
price of the products.
<strong>Resource</strong> <strong>Book</strong> on Horticulture Nursery Management : 135