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managerial economics_3 - get more output of farm products...

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1. Explain the effect of large crop yields in terms of its elasticity. Consider the elasticity of demand and its effect on farmers and policy makers. (Do research on the elasticity of demand for crop yields). => According to research result, demands for a majority of farm products are mostly inelastic, with Ed around 0.20 or 0.25. If we do large crop yields, we will
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Unformatted text preview: get more output of farm products, and this increase in supply will cause a decrease in farm product’s prices and the incomes of farmers. So, farmers are undesirable and the policy makers need to expand the preservation policy for income subsidies of farmers. P Q...
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