When a technological advance in wheat production is developed and applied to wheat farming,which of the following consequences is most likely?
A)The price of wheat decreases by 6 percent and the quantity of wheat sold increases by 10 percent.
B)The price of wheat decreases by 10 percent and the quantity of wheat sold increases by 6 percent.
C)Wheat farmers' total revenue increases.
D)All of the above are equally likely.

Question

Quizplus · Accepted Answer

When a technological advance in wheat production is developed and applied to wheat farming, the cost of production decreases and supply increases. This causes the price of wheat to decrease. The decrease in price will encourage consumers to buy more wheat, leading to an increase in the quantity of wheat sold. However, the increase in supply will be greater than the increase in demand, leading to a higher increase in quantity sold compared to the decrease in price. Therefore, the option B) is the most likely outcome. Option A) cannot be correct as the quantity of wheat sold will increase at a higher rate than the decrease in price. Option C) cannot be correct as total revenue depends on the change in price and quantity sold; if the decrease in quantity sold is higher than the decrease in price, total revenue may decrease. Option D) is not correct as only option B) is the most likely outcome, and the other options cannot be equally likely.

When a Technological Advance in Wheat Production Is Developed and Applied