Question

Give reasons:
The supply of agricultural commodity is relatively inelastic.

Answer 1

Relatively inelastic supply means the supply for the commodity will change in a proportion less than the change in its price.
In the case of agricultural commodities, supply will be relatively inelastic because they are necessary goods.
Change in the price of these commodities will not affect consumption much as agriculture is the backbone of the Indian economy.
Therefore, regardless of the change in the price of an agricultural commodity, its supply will remain relatively inelastic, that is, there will not be a drastic effect on supply.