The Demand for Agricultural Output Is Price Inelastic

question 156

Multiple Choice

The demand for agricultural output is price inelastic.This means that if farmers, taken collectively, have a bumper crop, they will experience:

• A) lower prices, greater quantities sold, and lower incomes.
• B) higher prices, greater quantities sold, and higher incomes.
• C) lower prices, quantities sold, and incomes.
• D) higher prices, quantities sold, and incomes.

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Definitions:

Tariffs

Taxes imposed by a government on goods and services imported from other countries.

Quotas

Set limits or targets, usually pertaining to sales, production, or imports and exports, that a company or government aims to achieve.

World Trade Organization

An international organization that regulates international trade, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

Imports

Goods or services brought into one country from another for sale.