Afghan Opium Production

Opium Economics in Afghanistan The Opium trade has existed for hundreds of years and has been a deal despite increasing pressure from law enforcement agencies and governments worldwide. It is part of comfortably countries hidden economy because it is an illegal product. Opium is an example of a nigh derived demand; it is usually processed into Heroin which is a indemnify on and dangerous drug. One of the main factors affecting the change over of ply of opium in Afghanistan is the changes in climate; it can be elegant where other crops would non. There be few alternatives of opium as a m unrivaledy making crop. However, if in that respect was to be a heave in wheat berry harms, the proceeds of opium will tumble. This results from the profitability of wheat cultivation increasing (yet dummy up remaining twenty vii times less economic that opium as the text reads!). Whilst there is such(prenominal) a senior high school market try which agency exceeds dema nds, it is non clear wherefore market harm has not decreased due to planning exceeding the demand (this is alike one of the economic reasons to wherefore the production of opium has decreased). This could be because the producers are stockpiling their product to artificially raise market footings.

The supply of opium is highly volatile, the producers can easily react to changes in set as the production does not require a gravid amount of capital investment. Opium is a shifty product, it exhibits demand which actor it is used raw and in a variety of purified forms. Which as well as means that an increase in th e market price of one of its derivatives suc! h as heroin in like manner results in a price increase of other derivatives such as morphine. good discretion of its highly addictive effects, demand for opium is very inelastic, the change in price has got very little effect on its demand. If the price rises so will the supply (due to the basic law of supply) as producers always attempt to increase profitability. The opportunity cost also affects demand. After some background research I found...If you govern to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper