EBK ECONOMICS
21st Edition
ISBN: 8220106637173
Author: McConnell
Publisher: YUZU
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Question
Chapter 22, Problem 1DQ
To determine
The impact of the elasticity on the demand and supply of the agricultural products and on its quantity and price .
Expert Solution & Answer
Explanation of Solution
Due to the inelastic nature of the demand for the agricultural products, the shift in the supply curve of the agricultural products leads to a large change in the
In Figure 1, the demand curve is relatively inelastic as compared to the supply curve. The new equilibrium (E2) shows that there has been a small change in the quantity of the demand with the drastic change in the price.
The volatile nature of the exports increases the instability of the demand for the agricultural products. The exports change from year to year; so, there is an increase in the instability for the demand of the agricultural products.
Economics Concept Introduction
Concept Introduction
Supply and demand of the agricultural products: The demand for the agricultural products is inelastic in nature because a large change in the prices has a very small impact on the demand for the agricultural products. The supply of the agricultural products is elastic in nature.
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