"if the demand for farm products is highly price inelastic, a bumper crop may reduce farm incomes" evaluate and illustrate graphically?
by 
Jacky508
ANSWERS: 1
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let's take the inverse proposition first, remember the last 3 E. Coli scares, spinach, tomatoes and lettus? Demand was more or less constant, and there was enough supply to fill demand, till people started getting sick. Goods were withdrawn from the market and fear of those goods reduced demand at the same time, but those who produced them, in places not suspect, saw their sales prices rise. In the question, unless there is a way to store the surplus (like the fresh greens above can't be) then in an inelastic market while demand is flat and supply spikes then the price of goods will collapse to a point where storage or export will support a new floor in price/cost
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