South Africa's Western Cape Province was hit by a drought in 2018. The province's major commodities are horticulture -fruit, wine and vegetables; livestock, meat and dairy; field crops like wheat, barley and canola. Production fell by 10% -30%. The economic review of South African Agriculture for the year ended 30 June 2018 then reported that the gross farming income made from all agricultural products increased by 2.1%. This was largely influenced but the increase in income derived from animal and horticultural products.

Question 1.

As a business economist, apply the 5 determinants of elasticity to discuss why the demand for animal and horticultural products might have an inelastic demand.

Question 2.

Using the concept of elasticity, explain how the farmers were able to make profits in the midst of the disaster (use a graph to illustrate your answer).

required: use any hvard referencing.