What actions might be taken by the government of (one country) to Essay

What actions might be taken by the politics of (one country) to annul and limit hurt fluctuations of coffee - Essay ExampleIf the toll of any product fluctuates highly and then the government can limit the fluctuation through token(prenominal) and maximum prices, too referred to as price flooring and price ceiling respectively (Dineshbakshi, 2015).The government can set a maximum price which must be below the equilibrium price of coffee in order to be impelling and disallow trading above that price level (Dineshbakshi, 2015). As, the price is below the equilibrium it will get to excess demand and eventually antecede to a shortage. In such cases there will also be some consumers who will be willing to buy coffee at a high(prenominal) price than the price set by the government and this will lead to black commercialises being created (Dineshbakshi, 2015). The lieu cannot be left this way and let the economic situation of the country worsen, thus further actions argon requir ed by the government (Dineshbakshi, 2015). Government may take total control of supplying these goods or even producing goods itself (Dineshbakshi, 2015). But the problem may remain as people may not parcel out all their stock of coffee and black markets may still remain. On the other hand if the government takes control of the production in its hand, it will be accompanied with may management and other skillful issues. The government can also help in eliminating this black market and the shortage in the market by supplying coffee from its own stocks (Dineshbakshi, 2015). All these steps by the government will lead to the supply curve shifting rightwards, achieving equilibrium and eliminating shortage (Dineshbakshi, 2015).On the other hand, if the government sets a minimum price which must be above the equilibrium price in order to be efficient and ban trading lower than that price level it may also help in decrease price fluctuations (Dineshbakshi, 2015). As the price is set ab ove the equilibrium price it will lead to higher supply and lower demand leading to a surplus of coffee in the market (Dineshbakshi, 2015). profusion can also be catered