Multiple Choice
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 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) The income elasticity of demand for wheat is high and wheat is an inferior good.
Correct Answer:
Verified
Correct Answer:
Verified
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