Factors affecting the price of watermelons at Los Angeles

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The Problem

As the quantity of any commodity put on the market increases, the value which the consumer places on each unit declines, and hence he will pay less for each unit. It is the purpose of this study to determine for a specific commodity at a specific market (watermelons on the Los Angeles market) how much prices have actually changed during the past six years with the various changes in the supply, and to measure the effect of all other factors on which data are available and which affect the price.

It is a matter of general experience that variations in the supply of one commodity may cause large proportional changes in its price, whereas similar variations in the supply of another commodity may cause only small proportional changes in its price. For example, an increase of 20 per cent in the supply of potatoes would cause a large relative decrease in their price.⁽⁸⁾ A similar increase in the supply of apples would cause a much smaller proportional decrease in their price.⁽⁵⁾ It is possible also that the demand for a commodity may change over a period of time. The price of potatoes seems to change more now for a given change in the supply than it did twenty years ago.⁽¹⁾ Changes of this kind however, usually come about gradually and the trend can be noted before a marked change occurs.