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24 February, 05:08

Distinguish between individual and market demand for a commodity

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  1. 24 February, 06:04
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    Individual demand is like the Kellogg company's interest in the future of corn on the market to make it's signature Frosted Flakes. Kellogg's is so large that their position on the commodity can impact overall demand.

    Market demand is like taking Kellogg's, Post, General Mills, and everyone else's interest in the future of corn on the market. Their combined level of demand (and willingness to pay) will automatically regulate the price of the commodity based upon it's supply. The free market will establish the price.
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