If the demand curve for agricultural products is inelastic and farmers as a group become more productive,then prices of agricultural goods will __________ and total revenue earned by farmers will __________.
A)decrease;increase
B)decrease;decrease
C)increase;increase
D)increase;decrease
E)We cannot answer this question without knowing how inelastic the demand curve is.

Question

Quizplus · Accepted Answer

When demand is inelastic, an increase in supply (due to higher productivity) leads to a decrease in price and a decrease in total revenue, as the percentage drop in price is greater than the percentage increase in quantity sold.

If the Demand Curve for Agricultural Products Is Inelastic and Farmers