Assume the price elasticity of demand for corn has been estimated to be 2.33.Flash floods destroy 10% of the nation's crop of corn.Which statement BEST describes how this will affect total expenditures on corn,all other things equal?
A)Total expenditures will remain unchanged.
B)Total expenditures will fall.
C)Total expenditures will rise.
D)The information is insufficient to answer the question.

Question

Quizplus · Accepted Answer

A 10% decrease in supply is expected to result in a 2.33% increase in price, assuming all other factors unaffected. Higher prices will discourage consumers and lead to lower total expenditure on corn.

Assume the Price Elasticity of Demand for Corn Has Been