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This mass-scale agricultural technique may be (economically) more beneficial for investors or producers, but in the long run, it can be very harmful to the environment. Pollution permits could increase the cost of production of avocados hence decreasing supply.

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An increase in demand due to any of the determinants that we explained could cause the producers to view this as a signal (signal effect/theory) due to this they are likely to increase their prices to earn more per unit sold and increase revenue

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A decrease in demand due to any of the determinants that we explained would cause the equilibrium price to fall; quantity supplied will decrease. To cope with this excess supply firms would lower prices in order to increase sales and sell more units.

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Avocado is mainly produced in California, Florida, and Hawaii in the United States. California accounts for 95% of the production in the United States. These can be grown only in tropical or sub-tropical climates, as avocado trees cannot tolerate freezing temperatures. Avocado production in the United States is heavily impacted by weather conditions and hence, shows yearly variations.

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As Avocados and Eggs would have a positive Cross price elasticity this evinces how they are substitutes hence meaning that any determinant changes in Eggs that may cause price changes of eggs due to excess supply or demand would lead to a change in the demand for avocados.

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Demand for avocados is price elastic which means it is very responsive to a price change: a small change in price can cause a major shift in demand. Since avocados are relatively luxury goods, they are elastic. Furthermore, avocados have several substitutes which means consumers can easily switch from one product to the other.

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Increase in deforestation in the tropical forests of South Africa, have led to a decrease in supply of avocados, as South Africa is a key location where majority of the avocados imported are grown.

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SOME NON-PRICE DETERMINANTS FOR THE SUPPLY FOR AVOCADOS

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SOME NON-PRICE DETERMINANTS FOR THE SUPPLY FOR AVOCADOS

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SOME NON-PRICE DETERMINANTS FOR THE DEMAND FOR AVOCADOS

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SOME NON-PRICE DETERMINANTS FOR THE DEMAND FOR AVOCADOS

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If the price of raw nuts decrease, demand for avocados will decrease, because avocados are substitutes of raw nuts so a rational consumer will maximise benefit by choosing the cheaper product

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Avocados contain vitamins A, B, C, E, and K, including 25 essential nutrients. They also contain antioxidants, like lycopene and beta-carotene. The essential nutrients are boosting the demand for the fruit globally, and therefore, this acts as a major driving force behind the growth of the avocado market.

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All the non-price determinants that have increased demand for avocados has caused excess demand in the market causing the equilibrium price to increase.

As a result, in order to correct this imbalance producers have employed more resources and increased production to meet the excess demand

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As an increasing number of consumers have been undertaking a vegan and vegetarian diets, demand for avocados has increased.

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Increase in population causes increase in market size and therefore demand for avocados will increase too.