If the demand for agricultural output is highly inelastic, an improvement in the technology used in the agricultural industry most likely will cause a:
A) small drop in the price of agricultural output combined with a small increase in quantity.
B) small drop in the price of agricultural output combined with a large increase in quantity.
C) large drop in the price of agricultural output combined with a small increase in quantity.
D) large drop in the price of agricultural output combined with a large decrease in quantity.

Question

Quizplus · Accepted Answer

When demand is inelastic, a significant increase in supply due to technological improvement will lead to a large drop in price but only a small increase in quantity demanded.

If the Demand for Agricultural Output Is Highly Inelastic, an Improvement