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

Question

Quizplus · Accepted Answer

When demand is price inelastic, a decrease in price (due to a good harvest increasing supply) leads to a proportionally smaller increase in quantity demanded, resulting in a decrease in total revenue.

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