Which factor contributed to the decline in farm prices in the late 19th century?

Which factor contributed to the decline in farm prices in the late 19th century?

• A. Increased export demand abroad
• B. Improved farm subsidies
• C. Overproduction of agricultural products
• D. Higher prices from new markets

Answer: (C)

The key idea here is how a rise in supply relative to demand lowers prices. In the late 1800s farmers expanded production—more land, better machinery, and easier freight—so the amount of agricultural goods available increased quickly. At the same time, demand didn’t grow enough to absorb all that output, creating a surplus. That surplus pushed prices down across crops. If export demand abroad had boosted sales, or if subsidies or new markets raised prices, the decline wouldn’t be as likely. So the drop in farm prices is best explained by overproduction of agricultural products relative to demand.

The key idea here is how a rise in supply relative to demand lowers prices. In the late 1800s farmers expanded production—more land, better machinery, and easier freight—so the amount of agricultural goods available increased quickly. At the same time, demand didn’t grow enough to absorb all that output, creating a surplus. That surplus pushed prices down across crops. If export demand abroad had boosted sales, or if subsidies or new markets raised prices, the decline wouldn’t be as likely. So the drop in farm prices is best explained by overproduction of agricultural products relative to demand.