Question

Discuss how seasonal factors influence supply and demand, and why markups on

fresh fruits and vegetable are at their highest during the peak of season.

Answer 1

Weather influences prices by affecting changes in the interplay of demand and supply. Dry seasons lower production levels, which then lowers supply, which in turn raises demand for the commodity due to scarcity, and hence causing a hike in prices for the commodity.

During the peak of season the demand for fresh fruits and vegetable increases, and the cost of growing fruits and vegetables decreases, as a result markups are the highest.