If the demand for agricultural products is price inelastic and the supply is dependent upon weather conditions,then
A)price changes are likely to be small,and farm revenues are likely to be highly volatile.
B)price changes are likely to be large,and farm revenues are likely to be highly volatile.
C)prices are likely to be constant,and farm revenues are likely to be constant.
D)prices are likely to be constant,and farm revenues are likely to be highly volatile.
E)price changes are likely to be small,and farm revenues are likely to be constant.

Question

Quizplus · Accepted Answer

If the demand for agricultural products is price inelastic, then price changes are likely to be large in response to changes in supply. Additionally, if the supply is dependent upon weather conditions, the supply of agricultural products is likely to be highly variable. Thus, farm revenues are likely to be highly volatile.

If the Demand for Agricultural Products Is Price Inelastic and the Supply