Question

Suppose the demand for wheat increased dramatically between 1950 and 2000 but the equilibrium quantity increased only slightly. Absent any other​ changes, what could explain the small increase in the equilibrium​ quantity? The equilibrium quantity of wheat could have increased only slightly given a dramatic increase in demand because

Answer 1

Answer:

Because Demand is more Inelastic.

Explanation:

Market Equilibrium is determined where Market Demand = Market Supply & upward sloping supply curve, downward sloping demand curve intersect .

If Demand is more inelastic (less respondent to price) , the demand curve is steeper. This implies massive increase i.e rightwards shift in demand curve - would establish new equilibrium with equilibrium quantity increased slightly.