If the demand for farm products is price inelastic, a bumper crop (an unusually good harvest)will cause farm revenues to
A)increase.
B)decrease.
C)be unchanged.
D)either increase or decrease, depending on what happens to supply.

Question

Quizplus · Accepted Answer

When demand is price inelastic, a significant increase in supply (such as from a bumper crop) leads to a decrease in price that proportionally reduces total revenue more than the increase in quantity sold can compensate for.

If the Demand for Farm Products Is Price Inelastic, a Bumper