Final answer:
The impact of technological advancements on asparagus prices and demand illustrates basic economic principles of supply and demand, and market equilibrium. The reduced asparagus prices have increased demand, but the shift towards more costly organic farming affects overall market prices and may not allow organic prices to match non-organic ones.
Step-by-step explanation:
The student's question pertains to how technological improvements in the agricultural sector, specifically concerning asparagus, affect the market equilibrium in terms of price and quantity. The question involves the principles of supply and demand, as well as market equilibrium adjustments. A 10% decrease in the price of asparagus has led to a 20% increase in the quantity demanded of the product, demonstrating the law of demand. However, it is also noted that an increase in the number of farmers practicing organic farming, represented by a rightward shift in the supply curve, has occurred alongside these changes.
The consequent increase in equilibrium quantity of organic foods suggests a higher output, yet whether the price decreases depends on the relative changes in supply and demand. If the increase in supply from organic farms is greater than that in demand, prices will fall. Nevertheless, since organic farming entails higher production costs due to organic fertilizers and more expensive pest management, organic food prices may not compete with non-organic food prices. In the context of asparagus, technological improvements can influence the market outcome, but this effect on price needs to be evaluated alongside supply changes, including the shift to organic farming.