ABSTRACT
The producer of manufactures can adjust price and output in response to short-term accurate information. Moreover, manufacturers can achieve a built-in stability of demand for their products through product differentiation, oligopolistic price and market-sharing agreements, and long-term supply contracts which are commonly practised by large corporations. Direct private investment from consumer to producer countries made up for the deficiency. Price instability also works indirectly by influencing host-government policies toward enterprises and consumers. A full commodity agreement is one incorporating buffer stocks and export and/or production limitations with the aim of stabilizing prices within a narrow range. The refusal by the developing countries and other raw material producers to bear, by themselves, the full economic risks and costs associated with interdependence will be the most effective political force pushing toward administered commodity markets in the future. A full commodity agreement is one incorporating buffer stocks and export and/or production limitations with the aim of stabilizing prices within a narrow range.
