If the demand curve for agricultural products is price inelastic,bumper crops would cause farm prices
A) and incomes to rise.
B) and incomes to fall.
C) to fall and incomes to rise.
D) to rise and incomes to fall.
E) and incomes to remain unchanged.

Question

Quizplus · Accepted Answer

If the demand curve for agricultural products is price inelastic, a bumper crop would cause the supply to increase. As a result, the market would experience excess supply, causing the market price to fall. Since the demand is price inelastic, the decrease in price would not lead to a significant increase in demand. Therefore, both farm prices and incomes would fall.

If the Demand Curve for Agricultural Products Is Price Inelastic,bumper