When agricultural production increases, the total amount paid for agricultural products tends to
A)increase because demand is price elastic
B)decrease because demand is price elastic
C)increase because demand is price inelastic
D)decrease because demand is price inelastic
E)remain constant because demand is price inelastic

Question

Quizplus · Accepted Answer

When agricultural production increases, prices tend to fall. If demand is price inelastic, the percentage decrease in price leads to a smaller percentage increase in quantity demanded, causing total revenue to decrease.

When Agricultural Production Increases, the Total Amount Paid for Agricultural