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19 Agriculture: Economics and Policy McGraw­Hill/Irwin Copyright © 2012 by The McGraw­Hill Companies, Inc. All rights reserved. Economics of Agriculture • Extreme diversity • Farm products and food products • Short-run price and income instability •Inelastic demand •Fluctuations in output •Fluctuation in demand • Dependence on world markets LO1 19-2 Economics of Agriculture • Effects of changes in farm output on agricultural prices and income P Pp p Pn n Normal Farm Pb Income b D 0 Increases Q Q Qb Q in output reduce farm income LO1 19-3 Economics of Agriculture • The effects agricultural P of a demand shift on prices and income P1 a P2 b 0 Shift in demand DD1 n causes a Q large change in price and farm income LO1 19-4 The Long Run: A Declining Industry • Supply increased rapidly •Technological progress • Demand increased slowly • Inelastic with respect to income • Population growth LO2 19-5 ... - tailieumienphi.vn