Major Food Articles Price Forecasting in Iran

Traditional microeconomics theory that is constrained on the perfect competition assumes that price is pre-anticipated، but the thing happens most of the times in real market is that the price changes according to the demand. This situation happens usually in the agriculture market and considered as the Cobweb Curves. As production is supplied in the market، the price reacts to adjust the market. In this contest، the inverse demand functions are used to investigate the response of price according to the quantity supplied. To address this، we used the Inverse Almost Ideal Demand System (IAIDS) for 8 major articles of food from the year 1353 to 1386 under different scenarios to forecast the prices. The results showed that the most self-quantity elasticity is related to meat (-1. 04) and the least one is for milk (-0. 77). Also، the result of quantity variation on the prices according to different scenarios indicated that if the quantity of the different food articles in the market decreases (increases)، their prices will increases (decreases). The results differ in various groups and its intensity is dependent on the quantity elasticity and scale elasticity of each article group of food.