Koshihikari is a variety of short grain rice that is used in Japanese cuisine. The rise in popularity of Japanese cuisine increases the consumption of rice appropriate for Japanese food dishes. An example of this is an increase in demand of Koshihikari rice. When the demand of a product increases, for the same level of supply, the equilibrium price is higher. An increase in demand for short grain rice raises the market price for Koshihikari rice. Suppliers are now able to charge a higher price as is being done by SunRice.
An increase in the price of short grain rice makes rice farmers produce more of these varieties. The area of cultivation of medium grain rice decreases. As a result there is a drop in supply of medium grain rice; the supply curve shifts and equilibrium price goes up.
If the demand of a product is inelastic, the amount demanded of the product does not decrease as price increases. The inelastic demand for medium grain rice would increase the total expenditure of customers as they are now forced to purchase the same amount at a higher price.
The introduction of a price ceiling results in a decrease in supply. This happens as the profit made by producers is restricted, and there is no incentive for them to increase the total production. The reduced supply causes a shortage of the product. If the government were to impose a price ceiling on medium grain rice, it would result in a shortage of the same. Farmers with the option of growing either short grain rice or medium grain rice would choose the former as it can be sold at a higher price and a large profit can be made.