If there is a rightward shift in the wheat supply curve, total revenue will increase only if wheat demand is inelastic.

Question

Quizplus · Accepted Answer

A rightward shift in the wheat supply curve indicates an increase in supply. Whether total revenue increases, decreases, or remains unchanged depends on the elasticity of demand. If demand is elastic, total revenue could decrease; if it is inelastic, total revenue could increase; and if it is unit elastic, total revenue might remain unchanged. The statement incorrectly simplifies the relationship by focusing solely on inelastic demand.

If There Is a Rightward Shift in the Wheat Supply