Why do agricultural prices often experience significant fluctuations?

Show Answers

Because supply responds strongly to price changesBecause demand varies greatly with price shiftsBecause the supply remains constant over timeBecause both demand and supply have low responsiveness to price changesBecause government policies regulate prices strictly

Explanation

Agricultural prices are prone to volatility primarily because both demand and supply are relatively unresponsive to price changes, meaning they are price inelastic. This inelasticity causes even small shifts in supply or demand to result in large price swings.