Question on: JAMB Economics - 2012

Here's why the cost of transportation is directly affected by a change in the pump price of petrol: * **Direct Relationship:** Petrol is a primary input cost for transportation. Vehicles (cars, buses, trucks, etc.) need petrol to operate. * **Cost Increase:** If the price of petrol increases, the cost of running these vehicles increases. This is because it costs more to fuel them. * **Transportation Costs Rise:** As the cost of fueling vehicles increases, transportation companies and individuals will need to raise their prices to cover these expenses, leading to a rise in the cost of transportation. * **Indirect Effects:** While the price of petrol can indirectly affect other things (like consumer goods and raw materials), the immediate and most direct effect is on the cost of transportation.