As a result of a poor growing season,the supply of apples decreases and total revenue falls.The demand for apples is
A)perfectly inelastic.
B)elastic.
C)inelastic.
D)unit elastic.
E)either elastic or unit elastic.

Question

Quizplus · Accepted Answer

Since the supply of apples decreases, the price of apples should increase due to the law of supply. The decrease in total revenue indicates that the increase in price did not fully compensate for the decrease in quantity demanded. Therefore, demand must be elastic--that is, consumers are sensitive to changes in price.

As a Result of a Poor Growing Season,the Supply of Apples