A recent news report lamented the plight of corn farmers in Wisconsin due to a severe drought. Which of the following best describes the effect on corn farmers in Minnesota, where sufficient rainfall occurred?
A) Their revenue increases because price increases and demand is elastic.
B) Their revenue increases because price increases and demand is inelastic.
C) Their revenue decreases because price decreases and demand is inelastic.
D) Their revenue decreases because price increases and demand is elastid.

Question

Quizplus · Accepted Answer

The severe drought affecting corn farmers in Wisconsin would reduce the overall supply of corn, leading to an increase in price. As demand for corn is generally inelastic, meaning that people will continue to need and purchase corn even at higher prices, the increase in price will result in an increase in revenue for corn farmers in Minnesota, where rainfall was sufficient.

A Recent News Report Lamented the Plight of Corn Farmers