As a result of heavy spring rains in the Midwest,the corn crop declined sharply.If corn growers experienced an increase in sales revenue,the demand for corn must be
A)price elastic
B)price inelastic
C)unitary elastic
D)perfectly inelastic
E)perfectly elastic

Question

Quizplus · Accepted Answer

The fact that the corn crop declined sharply due to heavy spring rains implies a decrease in the supply of corn available in the market. If the demand for corn remained constant or even increased, this suggests that the demand for corn is not highly sensitive to changes in price, i.e., it is price inelastic. Therefore, an increase in sales revenue could only result from an increase in the quantity demanded, which is more likely to occur with a product that has a price inelastic demand.

As a Result of Heavy Spring Rains in the Midwest,the