CEVAP:

The equilibrium price falls and the equilibrium quantity goes up. Since there is a fall in price, the revenue from sales for the sellers goes down since the demand for their product is inelastic. Recall that when the demand of the good is inelastic, an increase in price causes the total revenue to increase but in contrast a decrease in price causes the total revenue to decrease. Result indicate that technological improvements in the agriculture sector for the goods with inelastic demand cause the farmers’ income to decrease.