Read the following case carefully and answer the questions that follow:The prices of essentials goods, including fruits and vegetables, have increased in the last seven days due to short supply of use commodities in the local market, as the loaded vehicles with the essential commodities have been unable to enter Nepal through India and other regions.Despite the continuous transportation protest in Terai since over a month, Terai farmers had not been able to sell their products in the market as a result the price of vegetables had gone significantly down.As the loaded vehicles were unable to enter Nepal since few days, the vegetable prices have raised in the domestic market. The price of potatoes has increased by Rs 20 per kg each to Rs 60 and Rs 45, respectively. Similarly, price of cauliflower has gone up by Rs 15 per kg to Rs 45 per kg the price of French bean, on the other hand, has raised Rs 25 per kg to Rs 60 per kg, as against Rs 45 per kg last week, according to whole sale market of Fruits and Vegetables, Kathmandu.As per the price list of whole sale market of Fruits and Vegetable, Kathmandu, prices of other vegetables and fruits have also increased heavily. The price rise, especially of potatoes and onions, is mainly due to uncertainty of import from India. Price of dry onions has soared by eye-watering Rs 50 per kg compared with Rs 105 per kg.Even the price of other vegetables that are produced within a country has raised due to low supply created by transportation protest, prices of pointed gourd (parwal) and balsam apple (barela) has increased by Rs 15 per kg each and their prices have been at Rs 60 and Rs 70 per kg.Likewise, price of fruits has increased substantively, price of pomegranate has increased by Rs 35 per kg to Rs 225 per kg. That of pineapple by Rs 15 per piece to Rs 110. Price of guava increased by Rs 22 per kg to Rs 57 per kg. Price of fresh fish has also sky-rocketed by Rs 100 per kg and is fixed Rs 315 per kg, compared to Rs 225 per kg on last week, demand of fish falls from 85000kg to 72000kg.
Questions:
a. Identify the causes for rising prices and explain them.
b. What are the relevant factors that affect the demand for and supply of fruits and vegetables?
c. Do you agree that rate of price fluctuation of fruits and vegetables are influenced by their elasticities? Give reasons.
d. What types of price control measures that government can follow to maintain stable prices for fruits and vegetables?
