If the demand for corn is elastic,then:
A)there are not many substitutes in the consumption of corn.
B)the price elasticity of demand for corn is greater than 1.
C)a decrease in price will reduce total revenue for corn producers.
D)a decrease in price will increase total revenue for corn producers.
E)consumers will continue buying the same quantity even if price increases.

Question

Quizplus · Accepted Answer

If the demand for corn is elastic, it means that a decrease in price will lead to a proportionately greater increase in the quantity demanded. This is only possible if the price elasticity of demand for corn is greater than 1. Option A is incorrect because elastic demand implies that there are many substitutes, not the other way around. Option C is incorrect because a decrease in price will increase total revenue for producers when demand is elastic, not reduce it. Option D is correct for the same reason. Option E is incorrect because elastic demand means that consumers will reduce their quantity demanded when price increases, not continue buying the same quantity.

If the Demand for Corn Is Elastic,then