Considering the price-elasticity of demand for wheat, we would expect that if the supply of wheat increases, other factors constant, then wheat farmers' total revenues would
A) increase because the demand is price-inelastic.
B) decrease because the demand is price-inelastic.
C) increase because the demand is price-elastic.
D) decrease because the demand is price-elastic.

Question

Quizplus · Accepted Answer

If the demand for wheat is price-inelastic, an increase in supply will lead to a decrease in price, and since the quantity demanded does not increase proportionally, total revenue will decrease.

Considering the Price-Elasticity of Demand for Wheat, We Would Expect