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JAMB Economics 2005 Question 14

Question 14

Agriculture

The short-run inelasticity of supply of agricultural produce causes

  1. A.stability in prices
  2. B.a steady rise in prices
  3. C.a steady decline in prices
  4. D.instability in prices
Show the answer and explanation

Answer: D (instability in prices)

Explanation

Farm supply cannot adjust quickly, so changes in demand or harvests cause big swings in price: prices are unstable.