Case: India Shedding Tears Over Onion Prices

Assignment Questions

Group 5

Q.1 What factors affected the demand and supply of onions during the period of December 2010 to
January 2011?

Q2: What perceptions have you formed regarding supply and demand curves for onions in the short
run compared to the medium and long run? How were these curves affected by the situations
depicted in the case, and what was their impact on the market?
Group 6

Q1: Explain the impact of market forces and the government’s intervention in the form of a price
ceiling on the onion market using a diagram. (Hint: Draw two diagram: 1. The situation without the
government’s intervention; 2. The situation with the government’s intervention in the form of a
price ceiling – explain what happened when the government imposed price ceiling and how the
government cleared the market).

Topic for the class debate: All students have to participate in this debate

Topic: Should the government continue to subsidize onion prices in the event of a large supply
shortage or should it incur large investment expenditures to construct scientific cold storage
facilities to provide long-run stability in onion prices?