If the demand for agricultural products is inelastic, a relatively small increase in supply will cause farm prices and incomes to decline.

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers do not significantly increase their quantity demanded in response to a price decrease. Therefore, a small increase in supply can lead to a larger percentage decrease in price, reducing farm incomes.

If the Demand for Agricultural Products Is Inelastic, a Relatively