What does the following statement imply about price elasticity of demand? "Cherry producers in British Columbia experienced a healthy increase in revenues this year,despite a reduced harvest due to poor weather conditions."
A)elastic demand for B.C.cherries
B)elasticity of demand equal to one for B.C.cherries
C)inelastic demand for B.C.cherries
D)elasticity of demand equal to zero for B.C.cherries
E)infinite elasticity of demand for B.C.cherries

Question

Quizplus · Accepted Answer

The statement suggests that the decreased supply of B.C. cherries due to poor weather did not significantly affect the demand for them. This implies that the demand for B.C. cherries is relatively inelastic, meaning that changes in price do not have a significant effect on the quantity demanded. The fact that the cherry producers experienced a healthy increase in revenues despite the reduced harvest further reinforces the idea of inelastic demand.

What Does the Following Statement Imply About Price Elasticity of Demand