A government wants to keep farmers’ incomes stable. It does this by using a policy of buying and selling farm products on the free market. In which situation would it not have to react to changes in the supply of farm products?
- Awhen elasticity of supply of farm products is zero
- Bwhen farmers produce record harvests
- Cwhen price elasticity of demand for farm products is unitary
- Dwhen weather conditions can be accurately predicted