a. Sketch an industry supply-and-demand graph for a hypothetical farm product (e.g. rice or wheat) that faces relatively price-inelastic demand because it has few substitutes. Clearly label your graph.
b. Adjust the graph to show the effects of improvements in farm technology. Explain the processes underlying these effects. You may clarify your response with hypothetical prices and quantities.
c. Using information from your graph, explain why improvements in farm technology may not necessarily be good for some individual farmers. Assume that the industry is perfectly-competitive, so that each farm in the industry faces a perfectly price-elastic demand curve.