Answer to Question #184456 in Microeconomics for Morshedul Mowla Mezbah

Question

How did an export ban on onion by India affected the price of local onion in Bangladesh

Answer 1

To meet its domestic demand, Bangladesh depends heavily on Indian Onions. The export ban on onions by India to its largest overseas market(Bangladesh) caused the prices of onions in Bangladesh kitchen markets to increase exponentially. This was due to a reduction in the supply of onions. Onions are essential goods in the kitchen and therefore, a decrease in supply will lead to an increase in demand and prices.