Considering the price-elasticity of demand for wheat, we would expect that if the supply of wheat increases, other factors constant, then wheat farmers' total revenues would
A)increase because the demand is price-inelastic.
B)decrease because the demand is price-inelastic.
C)increase because the demand is price-elastic.
D)decrease because the demand is price-elastic.

Question

Quizplus · Accepted Answer

When demand is price-inelastic, an increase in supply (leading to a lower price) results in a less than proportional increase in quantity demanded, thus decreasing total revenue for wheat farmers.

Considering the Price-Elasticity of Demand for Wheat, We Would Expect