If the price elasticity of demand for farm products is low,abrupt changes in farm output will have a limited effect on prices.

Question

Quizplus · Accepted Answer

If the price elasticity of demand for farm products is low, it means that consumers are less likely to change their purchasing habits in response to changes in price. This implies that a sudden increase or decrease in farm output will have a greater impact on prices, as there is relatively little change in demand to absorb the extra supply (or shortfall in supply). Therefore, abrupt changes in farm output will have a significant effect on prices, rather than a limited effect as suggested in the statement.

If the Price Elasticity of Demand for Farm Products Is