In order for the producer to determine the price of the products, the following have to be taken into account.

Forces of demand and supply. Demand influences more the price of the commodity. If demand increases, the price increases and vice versa. If supply increases the price of the commodity falls and vice versa.

Cost of production. A high cost of production implies a high price and vice versa. Transport cost. The price of the commodity will tend to be high if the transport costs are high and vice versa.

Elasticities of supply and demand. If elasticities of supply and demand are low, the price will be high, and if elasticities of supply and demand are high the price will be low.

Storage cost. Some items are difficult and expensive to store. If the storage costs are high, the price of the commodity will be high and vice versa.

Government policy. Taxation leads to a high cost of production and high price for the commodity. Subsidisation of producers leads to a low price.

Show that a Decrease in the Supply of a Commodity might be favourable to the Producers depending on the Price Elasticity of Demand.

For the good analysis of this question, a number of diagrams have to be drawn. They should show various price elasticities of demand and a decrease in supply. The question is calling for the relationship between producer's revenue and price elasticity of demand. This question also calls for a conclusion.