QUESTION 2 "Industry organization Agri SA has expressed concern about rising input costs in the agricultural sector, echoing concerts raised by the Agricultural Business Chamber (Agbiz) earlier this week. Agri SA says the cost of direct materials, labour and other overheads are particularly wonying, while Agbiz mentioned how fuel costs are gnawing at agribusiness' profitability". Sunshine markets is producing and selling sweet potatoes and they have been impacted by the rising costs If sweet potatoes and potatoes are substitute products, which diagram above illustrates the effect on the sweet potato market of a decrease in the price of potatoes? CO C D QUESTION 3 (4 Mar Cooking oil prices are up 60%. The spike in the price of cooking oils is expected to remain high over the next few months, and could possibly extend until the end of the year. The crisis, which has been on-going for over a year, has been largely due to a global shortage in oil producing crops. The demands for oil are high, and currently standing, South Africa does not produce enough vegetable oil to be able to meet local demand. As a result, it has pushed the industry to source oils from Europe; having our domestic prices being influenced by international oil prices. The diagram below illustrates the demand and supply of cooking oil. NB: quantity x represents cooking oil Figure 2 Demand and supply for cooking oil Caps Lock is on