Suppose that the price elasticity of demand for blueberries in the Saguenay is 1.5.If climate change destroys one-fourth of the blueberry crop in this area,how will that affect total revenue for blueberry producers,all other things unchanged?
A) Total revenue will rise.
B) Total revenue will fall.
C) Total revenue will remain unchanged.
D) The information is insufficient to answer the question.

Question

Quizplus · Accepted Answer

With an elasticity of demand of 1.5, a 25% reduction in supply would lead to a 37.5% increase in price (1.5 x 25%). However, since demand is relatively elastic, the quantity demanded will decrease by more than 25%, resulting in a decrease in total revenue for blueberry producers.

Suppose That the Price Elasticity of Demand for Blueberries in the Saguenay