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. large drop in the price of agricultural output combined with a large decrease in quantity.
B. large drop in the price of agricultural output combined with a small increase in quantity.
C. small drop in the price of agricultural output combined with a large increase in quantity.
D. small drop in the price of agricultural output combined with a small increase in quantity.
Answer: B
You might also like to view...
The supply curve shows
a. the same basic information as the demand curve. b. who will have an opportunity to produce or purchase an item. c. the quantity produced as a function of the price. d. plots of what quantities have been sold over the past few weeks or months.
The demand for a resource is generally more
a. elastic in the short run because it takes time to alter the ratio of resources used in many production processes. b. inelastic in the short run because it takes time to alter the ratio of resources used in many production processes. c. elastic in the short run because an increase in the price of the resource may not be expected to last. d. inelastic in the short run because once resource suppliers find out they can charge a higher price, they will do so in the long run.