1. It assumes that products (former) are irrational and hence base their production decision on the previous prices without thinking of price changes but this is rather unrealistic because in reality farmers always think about changes in prices in the future.
2. The theory also assumes that all the quantity produced is sold in the market but this is also unrealistic because in the true sense some agricultural products are assumed for subsistence needs while others are stored waiting for sale in the future when prices are considered high.
It is thus clear from the previous discussion that the elasticity of demand depends not
only on the ratio of price to quantity demanded, but also on the slope of the demand
curve.
Wilfykil answered the question on March 6, 2019 at 07:27
- How is disequilibrium concept applied?(Solved)
How is disequilibrium concept applied?
Date posted: March 6, 2019. Answers (1)
- What are the effects of shifts of demand/supply curve on equilibrium?(Solved)
What are the effects of shifts of demand/supply curve on equilibrium?
Date posted: March 6, 2019. Answers (1)
- Given the following
Demand function: Qd = 3550 - 266p
Supply function: Qs = 1526 + 240p
Determine the equilibrium market price and quantity.(Solved)
Given the following
Demand function: Qd = 3550 - 266p
Supply function: Qs = 1526 + 240p
Determine the equilibrium market price and quantity.
Date posted: March 6, 2019. Answers (1)
- Explain the abnormal supply curves(Solved)
Explain the abnormal supply curves
Date posted: March 6, 2019. Answers (1)
- State and explain the factors that influence demand(Solved)
State and explain the factors that influence demand
Date posted: March 6, 2019. Answers (1)
- State and explain the two exception to the law of demand(Solved)
State and explain the two exception to the law of demand
Date posted: March 6, 2019. Answers (1)
- State the factors that influence the quantity demanded(Solved)
State the factors that influence the quantity demanded
Date posted: March 6, 2019. Answers (1)
- Define the following terms:
1. Demand Schedule
2. Demand diagrams(Solved)
Define the following terms:
1. Demand Schedule
2. Demand diagrams
Date posted: March 6, 2019. Answers (1)
- Elaborate on The nature and scope of economics.(Solved)
Elaborate on The nature and scope of economics.
Date posted: March 6, 2019. Answers (1)
- Explain the concept of scarcity and opportunity cost.(Solved)
Explain the concept of scarcity and opportunity cost.
Date posted: March 6, 2019. Answers (1)
- What are the Three types of definition that explain the meaning of economics?(Solved)
What are the Three types of definition that explain the meaning of economics?
Date posted: March 6, 2019. Answers (1)