Crops+in+CyberSpace+by+Dorothy+Chow

Crops of Cyberspace
 * TITLE OF EXTRACT: **

Chinadaily.com.cn
 * SOURCE: **

2/24/12
 * DATE EXTRACT WAS WRITTEN: **

2/20/12
 * DATE CURRENT EVENT WAS WRITTEN: **

There are many economic theories related to this article such as the supply and demand of walnuts, the transportation of goods, sustainability and the price elasticity of demand. The demand for walnuts have always been at a constant rate, however in this particular case the walnuts are in high demand not because of the product itself but the representation of the walnut. The supplies of the walnuts are presented online at a blog called 1.163 where the buyers can see pictures of the product and ensure quality. The consumers believe that by purchasing the walnuts they are offering help for the villagers of Nanjiushui where it is hard to transport goods. It is seen as a charity because of the conditions in their village. The consumers are willing to pay a higher price or not be bothered by the quality of the walnuts because it does not matter to them. This shows high price inelasticity because no matter how the farmers alter the prices there will still be the same amount of demand. This however did not come true because the farmers wished to uphold their reputation because now it is a factor of business, whereas before the products will be sold to firms which were then sold to consumers so the factor of reputation was never considered. Due to the location of the village, transportation is a big issue but other firms have co-operated with the village and agreed to transport their goods for one kuai less per kilogram giving the villagers a profit and motivating the villagers to expand their business by having villagers that left for the city come back to help build the business. One problem of this business is the sustainability of the land because the village soil may not last long by planting the same plant on the same soil season after season. It will ruin the soil and eventually the business might see hardships in maintaining the same amount of supplies and/or quality.
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 * VOCABULARY TERMS AND DEFINITIONS: **
 * Price Elasticity: how much the demand for a product changes when there is a change in one of the factors that determine demand.
 * Sustainability: able to be maintained at a certain rate or level (over exploiting land and soil)

The situation with this newfound business has many advantages since it brings in profits and helps the villagers with employment and also money to help their daily lives such as building roads and other improvements. It is very effective because the business has now built relationships with its clients and found a way to communicate properly with clients even with poor transportation. However, this business should not be seen as a long-term solution with consistent profits. A variety of foods should be provided to prolong the situation of sustainability and maintain the health of the soil. The village business to try to produce the highest quality walnuts for the sake of the relationship between them and the buyers, in addition I think that the village should offer a different quality to their walnuts to eliminate other competition and convince the buyers to buy their walnuts because of the quality of the walnuts and not solely because of charity. The walnut industry is fairly monopolistic, since there are many small firms that can enter or leave and all sell relatively the same product with variations between firms, hence the need for brand loyalty. This will help the business to have secured consumers and a longer lasting business.
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