Suppose that when the price of wheat is $2 per bushel,farmers can sell 10 million bushels.When the price of wheat is $3 per bushel,farmers can sell 8 million bushels.Which of the following statements is true? The demand for wheat is
A)income inelastic,so an increase in the price of wheat will increase the total revenue of wheat farmers.
B)income elastic,so an increase in the price of wheat will increase the total revenue of wheat farmers.
C)price inelastic,so an increase in the price of wheat will increase the total revenue of wheat farmers.
D)price elastic,so an increase in the price of wheat will increase the total revenue of wheat farmers.

Question

Quizplus · Accepted Answer

The demand for wheat is price inelastic because the percentage decrease in quantity demanded (from 10 million to 8 million bushels) is less than the percentage increase in price (from $2 to $3). Therefore, an increase in price will increase total revenue.

Suppose That When the Price of Wheat Is $2 Per