ABSTRACT
Agricultural supply response in developing countries has been a subject for investigations for a long time. In the analysis, the rural households are taken as the basic producing and consuming units which have outputs consisting of labour, capital agricultural as well as non-agricultural products, and service activities, of which marketing is a typical example. In the analysis the elasticities are used to predict: the effects of government intervention, such as pricing policies, taxation, fiscal incentives; and the impact of demand shifts, such as changes in export demand, income and population on prices and quantity of output. The chapter suggests that changes in demand and supply leads to changes in market prices as well as the quantity demanded and supplied. In studying the impact of supply response to relative changes in economic determinants, extended his previous study to include the impact of currency exchange rate adjustment on agricultural production.
