Technological advance and inelastic demand with respect to income are the reasons why ______.Multiple choice question.agriculture has been a declining industryagriculture is a growing industryagricultural markets have stabilized in the long runthe supply of farm products has declined over the long run
Question
Technological advance and inelastic demand with respect to income are the reasons why ______.Multiple choice question.agriculture has been a declining industryagriculture is a growing industryagricultural markets have stabilized in the long runthe supply of farm products has declined over the long run
Solution
The correct answer is "agriculture has been a declining industry".
Here's why:
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Technological advance: With the advent of technology, the productivity per unit of input in agriculture has increased significantly. This means that less labor and other resources are needed to produce the same amount of output. As a result, the relative importance of agriculture in the economy (in terms of employment and contribution to GDP) has declined.
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Inelastic demand with respect to income: As income increases, the demand for agricultural products does not increase proportionately. This is because once a certain level of consumption is reached, people do not consume significantly more food even if their income increases. This limits the growth potential of the agriculture industry.
Therefore, these two factors have contributed to the decline of the agriculture industry.
Similar Questions
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Agriculture gives boost to the industrial sector’. Justify the statement withany three relevant points
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