Long beans are in danger of running low in supply if the current indication is anything to go by. With the imposition of a ceiling price o RM2.20 per kilogram, coupled with inconsistent weather conditions, the wholesalers are worried that the supply of long beans would run out before Hari Raya. The Kuala Lumpur Vegetable Wholesalers Association chairman said that heavy rain in the past few weeks had contributed to the damage of most of the long beans planted.

Because Hari Raya, the government has imposed ceiling prices on 11 essential items, including long beans, early this month. This caused a sudden surge in the demand for the vegetable while the supply continued to decline. Some people may take advantage of the low price by buying it in the country and reselling it in Singapore as the price of long beans there is twice the price here.

State government officials advised consumers, especially those celebrating Hari Raya, not to do any last minute shopping. Otherwise, this would create a sudden increase in demand for raw foodstuff. This could lead to an artificial shortage of supply, which would give the opportunity to traders to hike the prices.

(a) List THREE (3) purposes for the enactment of a price ceiling on a product.

(b) Sketch a diagram and explain the situations in the market for long beans before and after the price ceiling.