Suppose the price of barley increases by 16.53%.If breweries buy 3.28% less barley after the price increase,the total revenue for barley producers will _____ because the _____ effect is greater than the _____ effect.
A)decrease;quantity;price
B)increase;price;quantity
C)not change;quantity;price
D)increase;quantity;price

Question

Quizplus · Accepted Answer

The total revenue for barley producers will increase because the price effect (a 16.53% increase in price) is greater than the quantity effect (a 3.28% decrease in quantity purchased). This means that the overall revenue from selling barley will be higher even though slightly less barley is being sold, due to the higher price per unit.

Suppose the Price of Barley Increases by 16