ECON 1012 Economics Avocados Are Dropping in Price Article Essay Questions

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Assignment 2
ECON1012 Principles of Economics Semester 2 2021
Course Learning Outcomes: 1 & 4
Topic/s of Primary Focus: Supply in Perfectly Competitive Markets
Demand in Perfectly Competitive Markets
Demand and Supply – An Equilibrium Analysis
(May also include content from previous topics.)
Read the following ABC News article ‘Avocados are dropping in price — great news for
some, lousy for others’ (15 Jun 2021)
https://www.abc.net.au/news/rural/2021-06-15/huge-avocado-supply-means-betterprices-for-consumers/100208446
A recent drop in avocado prices may help relieve some of the guilt you feel about
splurging on smashed avo on toast at a Sunday brunch when you ought to be saving
money.
Peak industry body Avocados Australia’s online retail pricing report has listed the price
of an avocado at about $1 each in major supermarket chains across the country.
Chief executive John Tyas said there had been a significant increase in avocado
production and supply, pushing prices down.
“Compared with last year, we’re going to [see] … 65 per cent more Australian
avocados harvested this year,” he said.
While that was great news for consumers, it could mean problems for growers. Tim
Keogh, owner of MMM Mangoes and Avocado’s near Rockhampton in Central
Queensland, said the increase in supply would hurt growers.
“It’s pretty tough at the moment in terms of price, just because of a huge supply that’s
come into the market,” he said.
“This season we’ve probably had the biggest crop we’ve ever had within our trees and
I’m sure that’s right across the board.
“Everyone’s having a big season.”
Mr Tyas said demand for avocados had not quite matched up with the sheer volume of
product available this year.
There were, he said, a few factors at play leading to reduced levels of demand:
•
•
•
The pandemic had led to cafes and restaurants within the major cities
periodically going into lockdown
More people were choosing to eat at home
There was generally a natural dip in the numbers of avocados consumed during
cooler months
“Supply is definitely exceeding demand at the moment,” Mr Tyas said.
“A lot of growers are doing it pretty tough at the moment — the prices have come
back, they’re very marginal.”
But, he said, it was not all bad news for growers.
“There’s definitely a lot of pain for individual businesses but, as an industry as a
whole, there are some benefits from the current situation as well,” he said.
“With the prices where they are at the moment, it makes us very competitive on a
price basis in export markets.
“So, we’re seeing a real increase in volumes that are going offshore.”
Mr Keogh said growers would need the support of Australian consumers as more and
more trees came online.
“It’s probably time for the consumer to get on board and multi-buy while they’re
cheap and make the most of it,” he said.
“I think it’s going to be challenging in years to come with the larger supply coming
through and that’s going to increase as the years go on.”
Despite the issues with demand, he said, it was clear consumers were still passionate
about avocados.
“Our consumption, I believe, is still going up and I think consumption still around the
world is increasing,” Mr Keogh said.
“I think there are plenty of mouths to put them in.”
Task:
Utilise the model of demand and supply to analyse the market for avocados in
Australia at the time of the article. Clearly explain the impacts on demand and on
supply, as well as the resulting impacts on the outcomes of price and quantity at the
time of the article. Also provide a prediction and explanation of how the outcomes
may change in the long run.
Ensure that you use diagrams where relevant to support your answer, and make sure
to use key terminology and course concepts where appropriate.
Format:
The format of your response should be an essay-style response.
You do not need subheadings or subsections.
You do not need to spend as much attention on formal essay structure as you might
for a persuasive or research-based essay. Instead you should focus on communicating
your ideas in a clear and concise manner and making sure there is a logical flow of
ideas and explanation.
Word Limit:
800 words (excluding diagrams and references)
Diagrams:
As stated in the task, you should include diagrams where relevant. Where you use
diagrams, they should be created by you. You could either draw them by hand and
scan/photo them into your document. Or prepare them electronically. However, they
must be your own work. You should not paste in diagrams from the internet or the
textbook, even with referencing, as this will not adequately show the grader your
understanding of these diagrams and models.
Referencing:
This is not a research assignment. So you do not necessarily need to find other
references. You should answer the question based on what you have learnt in the
course and the excerpt provided.
However, it is important that if you do take content directly from other sources
including course materials, both quoting and paraphrasing, that you appropriately
reference to show what is your own original thoughts and what ideas you have
borrowed from others. Please refer to the Academic Integrity Module within the course
for further guidance and links regarding referencing, plagiarism, and academic
integrity.
Where referencing is used, it can be in any standard style, so long as it is consistent.
The Harvard referencing style is preferred, as it is the standard in Economics and is
also common in Business disciplines.
https://www.adelaide.edu.au/writingcentre/resources/referencing-guides
All submissions will be analysed with the assistance of Turnitin, checking for
plagiarism against other students in the class and external sources.
Submission and Feedback
Students must submit the assignment by the due date via the electronic submission
portal on MyUni (the same page you downloaded this pdf!).
https://community.canvaslms.com/t5/Student-Guide/How-do-I-upload-a-file-as-anassignment-submission-in-Canvas/ta-p/274
It is students’ responsibility to ensure that it is correctly submitted by the due date.
Make sure that you see and check that is says ‘Submitted’.
Late submissions will generally *not* be accepted at all. Not even one minute late.
This might seem more strict than some of your other classes, but do keep in mind that
we also have a ‘best 4 of 5’ policy on the Assignments.
If you have a medical or other circumstance that you believe may allow an extension,
please email the course coordinator as soon as practical, and generally this must be
before the due date has passed.
Assignments will be graded, with grades and feedback provided within MyUni
approximately one week after the submission due date.
Grading
The assignment will be graded against the Assessment Criteria in the Rubric attached
to the MyUni Assignment and detailed below.
Grades will be allocated in-line with the University’s grade descriptors.
For example, a grade between 75-84 is a Distinction, which should indicate ‘A very
high standard of work which demonstrates originality and insight’.
Your grade is not matter of where you ‘lost marks’, but rather the evaluation of what
you have presented against the standards and the criteria.
Assessment Criteria
Response provides a convincing economics-based explanation of
changed market outcomes in the short run
Response provides a convincing economics-based explanation of the
how the outcomes may change in the long run
Evidence is shown of understanding of all relevant economic concepts
and terminology, which are correctly applied throughout
Diagrams are correctly depicted and are used wherever relevant to
support the explanation
Appropriate writing style, word count and referencing (where
relevant)
Marks (100)
25
15
25
25
10

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Principles of Economics

Price drop

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