Environmental Engineering Reference
In-Depth Information
(a)
(b)
Supply
Supply
Demand
Demand
AB
B
A
Quantity
Quantity
Fig. 1.2
Supply and demand for two contrasting natural resource systems. a) A
sole owner supplies only up to the maximum sustainable yield level, and demand is
elastic. This is a robust system in which an increase in demand, due to increased
consumer income for example, leads to a new slightly higher, but still sustainable,
equilibrium quantity supplied, at a slightly higher price. b) An open access system
in which demand is highly inelastic. The supply curve is backwards-bending due to
population depletion, and an increase in consumer income from the same
equilibrium point A leads to a much lower quantity supplied from a depleted
population, at a much higher price.
at a given price; Figure 1.2). Demand is determined by consumer tastes, their
income and the presence of alternative goods. Supply is determined by producer
costs, which in harvesting systems are mostly to do with the cost of finding and
killing prey, and so are related to the prey's biology, for example, to population size
and distribution patterns.
The slope of the supply and demand curves is called the
elasticity
, and this value
is fundamental to determining how changes in external factors affect change in the
equilibrium price and quantity (Begg
et al
. 2005). For example, if a good is a neces-
sity, then it has an inelastic demand curve—a 1% change in price will lead to a less
than 1% change in quantity demanded. The consumer has little choice but to go
on buying the good, because there are no other options. Basic foodstuffs are an
example of this. If, however, there are lots of alternative goods available, then a 1%
change in price will lead to a greater than 1% change in quantity demanded. For
example, if bushmeat is just one of many meat products available in a market, then
if the price goes up, people will simply switch to an alternative meat.
The elasticity of demand for a good is also important in predicting how
increased consumer income will affect demand for a good. For example, in
Equatorial Guinea, urban consumers have an income elasticity of 0.26 for bush-
meat, 0.55 for fresh fish and -0.27 for frozen fish (their least preferred, but most
consumed, protein source, because it is so cheap). This suggests that as incomes rise
