If the demand for farm products is inelastic,a good harvest will cause farm revenues to:
A)increase
B)decrease
C)be unchanged
D)either increase or decrease, depending upon what happens to supply
E)disappear

Question

Quizplus · Accepted Answer

When demand is inelastic, a good harvest (which increases supply) will lower prices, but the percentage decrease in price will be greater than the percentage increase in quantity sold, leading to a decrease in total revenue.

If the Demand for Farm Products Is Inelastic,a Good Harvest