Abstract
Increasing energy prices are bringing about disruptive changes in the economy of the United States and the world. The economies of the developed world are dependent on fossil fuels for the manufacture and transportation of essentially all commodities. One example of disruptions is the movement of fresh fruit, such as peaches. The production of fresh peaches is concentrated in the far West and the Southeastern United States from where they are shipped by truck or rail to the main consuming centers in the Northeast and Mid-west. Peaches are a perennial crop for which adjustments to changing economic situations require a number of years. The objective of this analysis is to measure the short-run effects of increased transportation costs on the producers and consumers of fresh peaches in the United States. This analysis will be short-run in that a perfectly inelastic supply is assumed.
Highlights
Increasing energy prices are bringing about disruptive changes in the economy of the United States and the world
It is further assumed that transporting the commodity from producer to consumer introduces transfer costs
The model did not allocate supplies to six terminal markets that received supplies in amounts larger than 30,000 pounds. These six centers were Atlanta,Birmingham,Columbia, Miami,Memphis,and Nashville.' The demand and transfer cost equations constructed for these markets obviously did not take into account why these markets received shipments larger than 30,000 pounds
Summary
Increasing energy prices are bringing about disruptive changes in the economy of the United States and the world. The economies of the developed world are dependent on fossil fuels for the manufacture and transportation of essentially all commodities. One example of disruptions is the movement of fresh fruit, such as peaches. The production of fresh peaches is concentrated in the far West and the Southeastern United States from where they are shipped by truck or rail to the main consuming centers in the Northeast and Mid-west. Peaches are a perennial crop for which adjustments to changing economic situations require a number of years
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