a bumper crop of farm products causes... a. only a slight decine in the price of

Question

a bumper crop of farm products causes... a. only a slight decine in the price of farm products becausethe deman for farm products for farm products is incomeineleastic b. a large decline in theprice of farm products because thedemand for farm products is price inelastic c. only a slight decline in the price of farm products becausethe demand for fram products is income elastic d. la arge decline in the eprice of fram products because farmproducts is price elastic a bumper crop of farm products causes... a. only a slight decine in the price of farm products becausethe deman for farm products for farm products is incomeineleastic b. a large decline in theprice of farm products because thedemand for farm products is price inelastic c. only a slight decline in the price of farm products becausethe demand for fram products is income elastic d. la arge decline in the eprice of fram products because farmproducts is price elastic

Explanation / Answer

            Abumper crop or a poor crop will cause large deviations from thesenormal prices and incomes because of the inelasticity ofdemand. Thus, Answer is Option (a) Only a slight decline in the priceof farm products because the demand for farm                                            products is income inelastic.

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