Demand for vegetables at a small farmers' market is steady,but the supply of vegetables has decreased because of a drought.This is good news for farmers if demand is _____ and the _____ effect outweighs the _____ effect.
A)inelastic;price;quantity
B)elastic;price;quantity
C)inelastic;output;price
D)elastic;output;price

Question

Quizplus · Accepted Answer

When demand is inelastic, consumers are less sensitive to price changes, meaning they will continue to buy relatively the same amount even if the price increases. Therefore, if the price effect (increased revenue from selling each unit at a higher price) outweighs the quantity effect (lost revenue from selling fewer units), farmers can benefit from higher overall revenue despite selling fewer vegetables due to the drought.

Demand for Vegetables at a Small Farmers' Market Is Steady,but