Based on the transcript, answer the following questions thoroughly:

With the different elasticities of demand in

a. thefarmgate pricesfor farmers as producers

b. andin thewholesale/retail pricesfor supermarkets, how can you characterize them? From this, which is considered more elastic or inelastic and why is this the case? What are the impacts that could cause a discrepancy on the welfare of farmersvis--vis the welfare of retailers?:

TRANSCRIPT:

Newscaster:There was a big difference in the price of vegetables from the amount it is being bought from the farmers in Benguet to the price that it is being sold in Metro Manila markets. Would you believe that 900% price increase is being added per kilo? Here's a news from Jonathan Andal.

Jonathan Andal:It's harvest time in Bugias, Benguet. The largest vegetable producer in the province, however, vegetable farmers here like Brent Mariano is troubled rather than excited about it. He said that their harvest would only cost Php 7.00 per kilo contrary to what supposed to be a Php20- Php40 selling price arrangement.

Brent Mariano:Vegetables are cheap nowadays because there is an oversupply. There was also a lack of storage facility due to the large amount of cabbages being harvested. The market distribution is rather limited, too.

Jonathan Andal: The other cabbages here is oversized like the one I'm holding. Others are no longer of good quality. Three weeks ago the farmers should have harvested it. But they did not do so because they waited for the price, to at least increase but to no avail. So now they are forced to harvest and sell it rather than let it rot and left it to be unprofitable. Brent harvested five tons of cabbage from Bugias while his uncle drove it for four hours to La Trinidad trading post where farmers and buyers or "middlemen" from Manila and other provinces meet. As they arrive, the 7.00 per kilo price is even more being offered with a lower price by the buyers or middlemen.

Lady:I asked her to pay me Php6.00 but she is only willing to pay me, Php4.00. I even offered her a Php5.00 price so that something would be left for the farmers.

Man [Tatay Lucas]:The price has been always like that because there's a lot of supply.

Jonathan Andal:Tatay Lucasbid the lowest. He was able to buy a ton of Brent's cabbage for four pesos per kilo. He immediately loaded it on a truck and transported it to Balintawak Market in Quezon City where his brother had a stall to sell those vegetables. He priced it for Php 5.00 per kilo. As it being sold in the market, they are already selling Brent's cabbage at its wholesale price of eight pesos per kilo.

Mang Lucas' brother:It is rather lean season that's why I can only top it up with a Php3.00 mark-up price.

Jonathan Andal:Ate Heidi bought it from them to sell it to the markets of Montalban, Rizal. From the original buying price of Php4.00 per kilo from the farmers, it became 5 pesos to 8 pesos then will be sold by Ate Heidi for Php40.00 per kilo.

Ate Heidi:The leaves are already peeling off therefore its weight is lessened. As a matter of fact, the price is cheaper compared to the price watch being suggested by the Department of Agriculture which is supposed to be Php60.00 per kilo. The price is higher than 15% compared to the price bought from Brent's farm.

Brent: It is indeed difficult. I worked everyday in this farm and it is painful on my part but I can do nothing about it. I cannot control the price, the decision's that people make. So that's the reason why. I just have to accept it.

Jonathan Andal: All 5 tons of cabbages were sold for Php20,400.00. But when all other expenses were deducted from it, the only amount left for them is Php3,180.00. His capitalization amounted to Php50,000.00 for three batches of harvesting.

Brent: It is indeed a loss. We might take a loan again when we have to plant next season. It's just that my capital has went along with it.

Mayor:Our problem we have here is that no assistance is being sent to local government unit for the farmers.

Jonathan Andal:Mayor Salda and Brent's suggestion is for the government to buy all these surplus but it is not the Department of Agriculture's mandate.

Department of Agriculture: The government cannot be engaged in direct marketing or selling or trading. We'll serve as the facilitators.

Jonathan Andal:Meanwhile, people like Brent just kept on planting, hoping that their hard works will pay off in due time.