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Abstract
Therefore empiric research of demand elasticity of agricultural and alimentary products
of Slovenia from year 2001 have been used, considering therefore that we
could approximately explain how relative changes in prices and income effect
demand of these products and how tendencies and trends which are specific for
Market of agricultural and alimentary products in this country, would sooner or
later reflect in our market too.The results that appeared, show that coefficient of
price elasticity on demand for group of agricultural-alimentary products (flour,
milk and dairy products, fat and oil, vegetables, fruits etc) have relative low value,
less than zero, so each price increase evokes relative low decrease of demand
which indicates the conclusion that demand is inelastic and such products belong to
so called necessity – subsistence products.Apart from that, cross-elasticity of
demand are very low so any price changes upwards and downwards are negligible
to changes on demand.
Coefficient of income elasticity of demand for group of agricultural products,
whose value is less that zero (flour products, vegetables, oil and fat, confectionery
products, soda drinks and others) belong to so called necessity products and each
income fluctuation would not substantially affects increase of demand, because
previous income level has attained certain saturation point. Coefficients of demant
elasticity have notable analitical significance for management in business policy of
company, especially price policy and planning of agricultural production.