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Business Data Management · Quiz 1 · 19 Jul 2026 · May 2026 term

Question 17: A farmer's association argues that 'good news for farmin…

Question 17

+3 marksOne correct option

A farmer's association argues that 'good news for farming' (a bumper crop/excellent harvest) can sometimes be 'bad news for farmers' financially. Which economic concept best explains this paradox?

  1. A

    The Law of Supply — higher supply always increases revenue

  2. B

    Inelastic demand for agricultural produce — a large increase in supply causes a proportionately larger fall in price, reducing total revenue

  3. C

    Economies of scope — producing more variety increases costs

  4. D

    Elastic demand — consumers buy significantly more when prices fall, maintaining revenue

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Correct answer

  • B

    Inelastic demand for agricultural produce — a large increase in supply causes a proportionately larger fall in price, reducing total revenue

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Question 17 of 23 in the IIT Madras BS Business Data Management (BDM) Quiz 1 paper sat on 19 Jul 2026, in the May 2026 term (Business Data Management 16 Jul 26). It carries 3 marks.

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