📚 Learning Guide
Market Dynamics in Agriculture
easy

What is likely to happen to the price of agricultural products if there is an increase in supply while demand remains constant?

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Learning Path
Learning Path

Question & Answer
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2
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3
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4
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Choose the Best Answer

A

Prices will increase

B

Prices will decrease

C

Prices will remain the same

D

Prices will fluctuate wildly

Understanding the Answer

Let's break down why this is correct

Answer

When there is an increase in the supply of agricultural products, it means that farmers are producing more of these goods than before. If the demand for these products stays the same, there will be more available than people want to buy. This situation usually leads to a decrease in the price of those products because sellers may lower their prices to attract buyers who have more options. For example, if there is a bumper crop of apples and everyone has plenty to choose from, sellers might reduce the price to encourage people to purchase them. Overall, increasing supply with constant demand often results in lower prices in the market.

Detailed Explanation

When more products are available but people want the same amount, prices usually go down. Other options are incorrect because Some might think more supply means higher prices; It's a common idea that prices stay the same with more supply.

Key Concepts

supply and demand
Topic

Market Dynamics in Agriculture

Difficulty

easy level question

Cognitive Level

understand

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