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1 February, 12:44

Is the demand for agricultural products elastic or inelastic? Why? The demand for agricultural products isa. elastic because such products have few close substitutesb. inelastic because they are perishable productsc. inelastic because such products are luxuriesd. inelastic because the markets for such products are defined very narrowlye. inelastic because such products represent a small share in the consumer's budget

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  1. 1 February, 13:05
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    The correct answer is option e.

    Explanation:

    Demand for a commodity is considered to be inelastic when a proportionate change in price causes less than proportionate change in quantity demanded.

    The demand for agricultural products is said to be inelastic. The reason behind this is that these goods are necessities and do not have any close substitutes. Also, they make only a small part of consumer's spending.

    So even if there is a change in the price of these goods the quantity demanded will not be much affected.
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