Increased productivity in the agricultural sector in conjunction with an inelastic demand curve for agricultural goods has caused a(n)__________ in output,a(n)__________ in price,and __________ revenues for farmers.
A)increase;decrease;higher
B)increase;decrease;lower
C)decrease;increase;higher
D)decrease;increase;lower
E)increase;increase;higher

Question

Quizplus · Accepted Answer

Increased productivity leads to an increase in output, but with an inelastic demand curve, the increase in supply does not lead to a proportionate increase in demand, resulting in a decrease in price. Lower prices result in lower revenues for farmers despite the increase in output. Therefore, the best choice is B, i.e., an increase in output, a decrease in price, and lower revenues for farmers.

Increased Productivity in the Agricultural Sector in Conjunction with an Inelastic