EFFECT OF TRANSPORT ON THE PRICES OF COMMODITY IN AMAC

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Price: 1000 Naira (SEMINAR, ASSIGNMENT)

ABSTRACT

The biting effect of transport cost on the prices of commodities in AMAC FCT has triggered the consciousness and interest of policy makers due to its impact on the welfare of the populace. Hence, this study examined the impact of transportation cost by exploring its causes and effects on the prices of consumable commodities in AMAC FCT. To achieve this, the participants were drawn randomly from different area of AMAC FCT. The instrument used in this study was a close-ended questionnaire designed by the researchers. Since it is usually not possible to study the entire larger population of all resident in Abuja, the researcher has chosen the AMAC FCT resident as the studied population. 210 copies of questionnaires were administered to the participants who are traders, identified consumers and commercial bus drivers, but 200 were returned and made available for analysis. The returned questionnaires were analysed using mean statistics with 2.5 as cut off point. The result shows that high transportation cost which is linked to bad roads, illegal collection of money by high way patrol team, high price of motor spare parts and high fuel prices contributes to the continuous rise of consumable commodities in AMAC FCTof Nigeria. Thus, the study recommends among other things that Nigeria government should endeavour to maintain the major high ways and other feeder roads to reduce wears and tears on transportation vehicles, and also curtail illegal collection of money by the high way patrol team to reduce the burden on transportation costs which impacts negatively on the prices of consumable commodities in the country. 

INTRODUCTION

The present day condition of the continuous rise in prices of commodities (consumable and durable) all over the country is well known to the populace and thus, the price increase has affected individuals in several ways, such as reduction in the standard of living people, high interest rate, etc the factor which affect this price escalation of consumable and durable commodities are broadly categories into human and natural factors. In the first place, the prices of the consumable and durable commodities will be high if many middle men partake in the process of distribution of the goods.   

Also, it has been proved that production cost is a direct valuable and the price of goods after every producer, has a duty of not only to recover investments but also to maximize profit. Secondly, the prices of goods can also be attributed to natural reasons, which are beyond the control of man. For instance, a period of unpleasant weather of heavy rainfall will definitely result to low production output, thereby leading to a reduction in the supply of consumable product and consequently affects their prices. It is clear therefore that price of goods is an inverse proportion of the market supply.

Apart from the factors mentioned above, other factors such as transportation cost labour and in fact all the factors of precaution account for the high increase in the prices of consumables products. The cost of all these are added to the real cost of the product to inflate or increase the prices. Hence, it implies that when the prices of these factors increase, indirectly the prices of the production will definitely increase and vice-versa.

In this research the main concern is transportation, the effect of transportation on prices, how does bad transportation system affect the prices of consumable and durable commodities? Also what relationship has distance with these products that are transported have on the relative prices of each products? Does good transportation system reduces prices of consumable and durable products in any way? These are aforementioned questions from the background to this study. 

The purpose of this study is to analyze the effects of transportation on relative prices of some selected products in AMAC, FCT.This study will also highlight on the relationship between transportation and the price of consumables products in this local government area.Also, this study will also try to show the effects of this high price on those that are involved in consuming the gods (the consumer).Finally, to highlight and suggest solution or remedy to combat such price increaseThere are quite a lot of contributions that this study will make. In the first instance the study will clearly show how transportation cost affect the prices of consumable and durable products. It will also show the various means of transportation found in AMAC, FCT and the problem association with them.

The government on their part has been insensitive about the problems of transportation in most Local Government Area and this has resulted in poor transportation system, therefore, an increase of relative price of the consumable and durable products. In synopsis therefore, a critical study of all the points aforementioned will help the government to look at these problems of inadequate and inefficient transportation system especially at the local government level and find possible solution to ameliorate the plight of the people (consumers).

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