Suppose farmers get together and decide to be less productive.They want to do this so that they can shift the supply curve of farm products leftward and raise the price.They must be assuming that the demand curve between the current price and the higher price is
A)inelastic.
B)elastic.
C)unit elastic.
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

The farmers are assuming that the demand curve is inelastic because if they reduce supply and the price increases, they expect total revenue to increase, which happens when demand is inelastic.

Suppose Farmers Get Together and Decide to Be Less Productive