In: Economics
As an agribusiness manager you find out that a large cooperative group in your area jmhas decided to take supplies off the market through a marketing order. Ehat does this imply about the elasticity region for the cooperative? Based on your answer, will removing the supplies necessarily result in an increased profit?
The cooperative is taking its own product out of shelf which may mean that the cooperative has found a faut in the products or would introduce a new product by replacing them. Thus, without a full and much of consumer attention it has placed an order to buy out its products from the shelfs. The elasticity or the price elasticity of the cooperative is thus great which can buy out its products and also relace them with better ones. The busines did pay a bit more to buy them out and make the product unavailable to make the new product in and keep the feed on.
The removing the supplies as in this case is a great example of how a business works to keep up its credibility. The brand image is based on performance and if the product batch is bad or not up to the quality, the brand orders buy back to replace the batch which is a good way to do the same without any fuss. This is needed to keep the long-term profits based on the brand image and buyer’s perception intact for the long run.