The low price of grain hurts farmers and small profits but quick turnover.

Haha, this is one of the classic questions often asked by teachers to explain the price elasticity of supply and demand.

You can find many answers on the Internet. In fact, they are all about the different sensitivity of price to supply and demand.

The following is one of the answers, for reference only:

The practice of lowering prices to increase profits is called small profits but quick turnover. The phenomenon of a bumper agricultural harvest but a decrease in farmers' income is called low grain prices hurting farmers.

1. The elasticity of demand for various items is different and can be roughly divided into two types. One is items with elastic demand, with demand elasticity greater than l, such as luxury goods, cosmetics, etc. This kind of product is dispensable. If the price drops, you can buy more, if the price rises, you can buy less, so within the reasonable price reduction range, Total profits increased. The other is items with inelastic demand. The elasticity of demand is less than 1, such as daily necessities. The valley here is one of them. These products will not be bought less due to price increases, nor can they be bought in large quantities due to price cuts.

2. The small profit in "small profit but quick turnover" means lowering the price. Lowering the price can lead to more sales, and more sales will increase the total revenue. Only goods with elastic demand can achieve "small profits but quick turnover". Because for a commodity with elastic demand, when the price of the commodity decreases, the increase in demand is greater than the decrease in price, so total revenue will increase.

3. When grain prices fall and total income decreases, this is what we generally call low grain prices hurting farmers. "Cheap grain" refers to a drop in prices caused by a bumper harvest of grain. Grain is a necessity of life, and demand is inelastic, which reduces total income. "Hurt farmers" means farmers' income will decrease.