Supply and Demand
The classical capitalist economic system is based on demand and supply mechanism. The classical economists believed that government intervention, in economic affairs, lead to economic disequilibrium, and because of which, both producers and consumers suffer. Therefore, the classical economic model did not have fiscal instrument and government could only influence economy, to certain extent, through monetary instrument.
Even the Keynesian economists, who believe that capitalist economy is inherently unstable and flawed, slyly agree that government intervention should be avoided and fiscal instrument should only be used for developing a region or digging economy out of economic crisis, as it happened in 1930s, when capitalist economies used fiscal instrument to end deflationary trend and to increase consumption.
In the modern times, where fiscal instrument is used frequently, demand and supply still plays the most vital role in stabilizing economy. Economists believe supply and demand reflects true price and consumption pattern in economy.
American agriculture sector is highly segmented and beef industry is its major component, which is lucrative and because of ever-increasing demand has high attraction, as industry. As per stats, the industry is constituted by 100,000 businesses, which are small, medium and large, in size. The stats also reveal that in the beef industry, of US, there are around 800,000 ranchers and cattle producers.
In the recent years the demand for the beef has increased, dramatically, which has also increased its prices. It is a known fact that with the increase in demand, of a normal good, the price of a product or service increases.
This can be explained with the help of graph, which depicts demand and supply curves.