Figure 5-12

-Refer to Figure 5-12.When a new,more productive strawberry plant was developed,causing supply to increase,what happened to strawberry farmers' total revenue,and why
A)It fell from $6000 to $5250, since supply is elastic.
B)It fell from $6000 to $5250, since demand is inelastic.
C)It fell from $6000 to $5250, since supply is inelastic.
D)It fell from $6000 to $5250, since demand is elastic.

Question

Figure 5-12
 
-Refer to Figure 5-12.When a new,more productive strawberry plant was developed,causing supply to increase,what happened to strawberry farmers' total revenue,and why
A)It fell from $6000 to $5250, since supply is elastic. 
B)It fell from $6000 to $5250, since demand is inelastic. 
C)It fell from $6000 to $5250, since supply is inelastic. 
D)It fell from $6000 to $5250, since demand is elastic.

Quizplus · Accepted Answer

When supply increases, the price tends to fall. If demand is inelastic, the percentage drop in price leads to a smaller percentage increase in quantity demanded, causing total revenue to fall.

Figure 5-12 -Refer to Figure 5-12.When a New,more Productive Strawberry Plant Was