According to the washington post article the downsides of cheap corn, farmers' 2014 crop revenues were down from prior years, despite very productive harvests all around the united states. Which of the statements is the explanation offered by the article for this apparent paradox? The increase in the supply of crops has decreased prices by a greater percentage than the percentage increase in quantity of sales. Consumer demand for agricultural crops such as corn, soybean, and wheat are at record lows. The costs of farming have increased faster than productivity, leading to higher crop yields but lower profits. An influx of farmers entering the agricultural market has led to fierce competition, driving down revenues.

Question

Fernando Terrell

Business

27 November, 22:07

According to the washington post article the downsides of cheap corn, farmers' 2014 crop revenues were down from prior years, despite very productive harvests all around the united states. Which of the statements is the explanation offered by the article for this apparent paradox? The increase in the supply of crops has decreased prices by a greater percentage than the percentage increase in quantity of sales. Consumer demand for agricultural crops such as corn, soybean, and wheat are at record lows. The costs of farming have increased faster than productivity, leading to higher crop yields but lower profits. An influx of farmers entering the agricultural market has led to fierce competition, driving down revenues.

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Answers (1)

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Simon · Answer 1

Answer:The increase in the supply of crops had decreased price by a greater percentage than the percentage increase in the quantity of sales.

Explanation:

An increase in supply leads to a fall in price due to large volume of goods supply compare to non increasing demand and when the rate of fall is greater than sales this will not lead to a rise in revenue despite the increase in effective supply to the market.