Since 1950, there has been a substantial increase in wheat production. The increase in production has led to a decrease in the price of wheat because of which of the following factors?
A) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is greater than 1.
B) The absolute value of the price elasticity of demand for wheat is greater than 1 and wheat is a close substitute for other food products.
C) The income elasticity of demand for wheat is high and wheat is an inferior good.
D) The absolute value of the price elasticity of demand for wheat is less than 1 and the income elasticity of demand for wheat is low.
D
You might also like to view...
Early structural adjustment programs were least likely to include
a. social safety nets b. currency devaluations c. restrictions on money supply growth d. import liberalization e. most programs included all of these
Most cohesion funds in the EU budget go to the wealthier EU member nations
Indicate whether the statement is true or false