COBWEB THEOREM IN RELATION TO THE FRUIT MARKET

Abstract

The cobweb theorem is the economic theory on the dynamic equilibrium analysis, which is usednot only in agriculture but, when some conditions are fulfilled, on the various markets as well. The theoremassumes, that producers base their current output on the average price which they obtain in the marketduring the previous year. Some researchers accuse, however, that this theorem simplifies the reality toomuch, especially while contemporary market is developed and complex. This theorem derives, however,from the agricultural market, where was primary observed in practice. What was quite predictable wasthe fact, that nowadays influence of farm-gate price value from previous year is statistical insignificantfactor on the way to make the production decisions up. This conclusion let us suppose, that producers areconscious market players. Their production decisions are derivatives of other factors. The statistical toolsused in this paper it is the correlation analysis with lags for first differences of time series of prices andharvested area of raspberry, chokeberry and black currant.

Keywords

• cobweb theorem
• supply
• demand
• farm-gate price
• fruit