Because supply and demand conditions for primary products are very price inelastic their prices ?
Correct answer: D. tend to be very unstable from year to year
- A. have been steadily rising in recent decades
- B. have been more stable than the prices of manufactured goods
- C. fluctuate about as much as the prices of manufactured goods
- D. tend to be very unstable from year to year
Explanation
With price-inelastic supply and demand, even small changes in production or demand can cause large price movements. Primary-product prices therefore tend to be unstable from year to year, unlike the claim that they have steadily risen.
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