When the aggregate supply of food grains increases, the total income of the farmer falls. On this basis, state what will be the demand curve for food grains

Elastic
Inelastic
Unit elastic
Perfectly elastic

The correct answer is: B. Inelastic

The demand for food grains is inelastic because the demand for food is a necessity. When the aggregate supply of food grains increases, the price of food grains will decrease. However, the demand for food grains will not decrease significantly because people still need to eat. This means that the total income of the farmer will fall because the price of food grains has decreased, but the quantity of food grains sold will not increase significantly.

An elastic demand curve is a curve that is relatively flat. This means that a small change in price will result in a large change in quantity demanded. An inelastic demand curve is a curve that is relatively steep. This means that a large change in price will result in a small change in quantity demanded. A unit elastic demand curve is a curve that has a slope of -1. This means that a 1% change in price will result in a 1% change in quantity demanded. A perfectly elastic demand curve is a horizontal line. This means that consumers are willing to buy any quantity of a good at a given price, but they will not buy any quantity of a good at a higher price.

In the case of food grains, the demand curve is inelastic because food is a necessity. People need to eat, so they will continue to buy food even if the price increases. This means that the total income of the farmer will fall when the aggregate supply of food grains increases.

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