Long, hot summer sends food prices soaring - CNN.com - 1 views
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Connor Wood on 14 Sep 12The consumer incentives have changed and have increased the demand to now be much higher than previously. What this does to the producer incentives is that it makes then want to supply more because they will both make more money for each unit and be selling more at a faster rate. The new resource allocation that would take place from this event would be that previously allocated resources for other things are now being moved towards agriculture and food producing industries. For example if cows were previously being bred due to their high price, because the demand has increased the producers may now be willing to buy these cows for dairy products or milk.