Suppose the price elasticity of demand for blueberries is 1.5.If climate change destroys one-fourth of the nation's blueberry crop,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 a price elasticity of demand of 1.5, a 25% decrease in supply would lead to a 37.5% increase in price (1.5 x 0.25 = 0.375). However, the increase in price is not enough to offset the decrease in quantity demanded, resulting in a decrease in total revenue. The decrease in revenue would be greater the more elastic the demand for blueberries is.

Suppose the Price Elasticity of Demand for Blueberries Is 1