The demand for agricultural produce is generally
Question 1 Report
The demand for agricultural produce is generally
Answer Details
Demand for most farm products is inelastic. People can consume only so much then they are satiated. Even if price drops they will not buy much more. When demand is inelastic a drop in price that spurs more quantity being sold results in lower revenue and profit for the producer.
Choice B is correct. A price inelastic demand would mean that an increase in price would not necessarily lead to a decline in quantity demanded or in case it does proportion of quantity change would be lesser vis a vis the change in price.
Demand tends to be price inelastic for agricultural produce for the following reasons.
1. Price changes don't affect consumption much
2. These produce are mostly necessities
3. Possibility of postponement is not there for most of these produce
Choice B is correct. A price inelastic demand would mean that an increase in price would not necessarily lead to a decline in quantity demanded or in case it does proportion of quantity change would be lesser vis a vis the change in price.
Demand tends to be price inelastic for agricultural produce for the following reasons.
1. Price changes don't affect consumption much
2. These produce are mostly necessities
3. Possibility of postponement is not there for most of these produce
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