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Agricultural prices are relative values of agricultural goods and services in terms of money at a...

Agricultural prices are relative values of agricultural goods and services in terms of money at a particular place and time. In agriculture, prices have three major roles; mention and explain.

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Agricultural prices are relative values of agricultural goods and services in terms of money at a particular place and time. In agriculture, prices have three major roles; mention and explain

-- Distributive function: Agricultural resources are limited, however wants and needs are unlimited; thus price plays an important role to determine affordability and those with the buying power can have the limited

-- Signalling and Equilibrating function: Prices informs the demand and supply situations .The surpluses are reflected in lower prices while shortages are reflected in high prices. The price plays a major role to facilitate matching of demand and supply thus clearing the agriculture market.

-- Transmission function: Prices plays an important role to transmit information to various actors in agriculture market therefore allowing them to make informed decision on what and when to sell and buy.

Rahul Sunny answered 1 year ago
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