In 2012, Canadian farmers did not suffer from drought conditions that affected the United States, but they did enjoy the higher corn prices. Canadian farmers reacted to the higher price by planting more corn. Suppose that the price of corn increased by 30 percent and the Canadian farmers increased the quantity of corn they supply by 20 percent. The supply of corn is
A) perfectly inelastic.
B) unit elastic.
C) elastic.
D) inelastic.

Question

Quizplus · Accepted Answer

The supply of corn is inelastic because the percentage change in quantity supplied (20%) is less than the percentage change in price (30%).

In 2012, Canadian Farmers Did Not Suffer from Drought Conditions