Prices of commodities - ranging from grocery to energy to building material to medical products - are on the rise making life more and more miserable.

· Look at the causes and effects of these skyrocketing prices? jaypees.doc. 27/4/09

Price rise is a common market phenomenon in all markets, and the reasons for the same vary from market to market. However, there are certain common factors that can be attributed to all markets, and needless to say price rise has far reaching consequences. 40 words

To begin with, the most important reason for price rise is the increasing power of money, or in general terms, it is inflation. For example, when people handle a lot of easy money, they have a tendency to spend more on products and services which otherwise would be available for far less. Secondly, it is the market forces. Second major reason is the rising imbalance between supply and demand due to rising consumption. For example, when there supply shortage, the available products would go dearer. This will, in turn, result in the third reason. It makes traders resort to unhealthy market practices like hoarding, leading to artificial demand. Finally, the upward spiral in the oil prices in the international market adds fuel to fire. 105

When it comes to its consequences, there are many with long and short societal implications. The foremost result is that ordinary life of the people will come to a halt. For example, the low income group in the society will have to tighten their belts. This will lead to many poor social indices like, health, education, child mortality and morbidity to mention a few. Secondly, it widens the gap between the rich and poor. The rich becomes richer and the poor becomes poorer. This ultimately will cause social unrest and disharmony. Other major results are poverty, malnutrition, unhealthy trade practices and rise in crime rates. 95

So, it is right to conclude that price rise is a common market trend everywhere. Unless governments intervene in time and take effective measures to keep prices under check, ordinary life will be difficult and the same will have far reaching ramifications in the society. 40

270 words. Jaypees.
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