1. Use of Buffer Stock as a Means of Stabilising Prices
... Q3. But due to the increase in price, demand falls from Q1 to Q2 so there is an excess supply of Q2Q3. In the case of wheat, when free market price is below the intervention price, the buffer stock agency that is funded by the government will buy in the wheat (which is called the buffer stock) and when the free market price ... buffer stock whilst not being able to sell it off. Some of the buffer stocks such as milk and beef cannot be stored for over a certain period of time so they have to be destroyed. With these kind of stocks, the buffer stock agencies will almost definitely lose mo...
- Word Count: 568
- Approx Pages: 2
- Grade Level: High School