Why might farmers' incomes decrease when there is an increase in supply in an agricultural market?

Show Answers

Because the supply responds strongly to price changesBecause demand does not change much with price variationsBecause the government purchases all surplus produceBecause all products are sold at a fixed maximum priceBecause farmers reduce their production voluntarily

Explanation

When demand is price inelastic, an increase in supply leads to a significant drop in price, causing farmers' total revenue to decline despite selling more produce.