A decrease in the supply of an agricultural product will increase the total revenue of farmers if the demand for the agricultural product is

Question

Quizplus · Accepted Answer

When the supply of an agricultural product decreases, the price of the product will increase. If the demand for the product is price inelastic, then farmers will experience an increase in total revenue as the increase in price will more than offset the decrease in quantity sold.  On the other hand, if the demand for the product is price elastic, then the increase in price will result in a greater decrease in the quantity demanded, leading to a decrease in total revenue for farmers.

A Decrease in the Supply of an Agricultural Product Will