In the short-run, the supply is only OQ-| and the price is OP-, which is very high. In the long-run, the supply is OQ₂ with a lower price of OP₂.

Inelastic demand. The demand for agricultural products and especially foodstuffs tends to be inelastic. It is very difficult to substitute one product for another. If one foodstuff is in surplus, it will not receive new customers and consequently its price reduces. If it is in a shortage, the consumers would find it difficult to obtain a substitute. Consequently, there will be an increased demand for this product leading to a price increase.

Divergence between planned output and actual demand

It is very difficult to plan accurately the amount of the agricultural output that will come onto the market. There is a divergence between actual demand and actual supply. When the actual demand exceeds the actual supply, the price increases. If the actual demand is less than actual supply, the price decreases. Demand depends on the current price while supply depends on the price of the previous period. If the current price is high, producers expect that it will continue to prevail and therefore, they plant great quantities.

However, by the time this harvest is made, the demand has already fallen. Consumers are willing to buy these large quantities at a low price. Since the supply exceeds demand, the price decreases. If producers expect a low price to persist, they reduce the quantities planted. However, at the harvesting period, small quantities come onto the market. The demand exceeds the supply and consumers are willing to offer a high price (Cobweb Theory).