Question

Cash Markets Assignment
I am looking for 2-3 paragraphs.

Cash markets are where or how the physical commodities are bought and sold. These markets tend to be local. For example, a corn farmer in Ottumwa IA would not sell their grain to an elevator in Crookston MN. That means cash prices are local. Since prices are determined by supply and demand, cash prices are determined by local supply and demand. Explain why the cash price for corn in Crookston MN might be different than the cash price for corn in Ottumwa IA. What types of things could influence the local cash price for corn? Think about what corn can be used for.

Answer 1

As identified in the given paragraph, cash prices are determined by local supply and demand. Each locality i different from other localities in terms of social, economic and cultural dimensions. This is reflected in different needs of different locality and thus diverse local demand. Due to such variance in local demand, the amount supplied in each locality also varies greatly.

There can be various factors that can influence the local cash price for corn. In view of variable economic dimension among societies, income is a major determinant for demand, Relatively richer localities can afford to buy more corn and thus the demand and supply of corn can be higher in these localities. Again the supply will vary depending on the local use of corn. Corn can be used to feed livestock and areas primarily dominated by agriculture thus can have higher demand for corn. Such variables influence the demand and supply forces and leads to great variance among localities.