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, 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

The price elasticity of demand for blueberries is 1.5, which means that a 1% increase in price will lead to a 1.5% decrease in quantity demanded. If climate change destroys one-fourth of the nation's blueberry crop, the supply of blueberries will decrease, which will lead to an increase in price. The increase in price will lead to a decrease in quantity demanded, which will lead to a decrease in total revenue.

Suppose the Price Elasticity of Demand for Blueberries Is 1