QuestionJune 2, 2025

If demand for farm crops is inelastic, a good harvest will cause farm revenues to Multiple Choice increase because of the increase in the quantity that farmers can sell. increase because of a downward movement along the supply curve, encouraging an increase in demand. decrease because of a percentage fall in price that is greater than the percentage increase in quantity sold. remain unchanged, because the increase in quantity that can be sold will be matched by an equal decrease in price.

If demand for farm crops is inelastic, a good harvest will cause farm revenues to Multiple Choice increase because of the increase in the quantity that farmers can sell. increase because of a downward movement along the supply curve, encouraging an increase in demand. decrease because of a percentage fall in price that is greater than the percentage increase in quantity sold. remain unchanged, because the increase in quantity that can be sold will be matched by an equal decrease in price.
If demand for farm crops is inelastic, a good harvest will cause farm revenues to
Multiple Choice
increase because of the increase in the quantity that farmers can sell.
increase because of a downward movement along the supply curve, encouraging an increase in demand.
decrease because of a percentage fall in price that is greater than the percentage increase in quantity sold.
remain unchanged, because the increase in quantity that can be sold will be matched by an equal decrease in price.

Solution
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Answer

Decrease because of a percentage fall in price that is greater than the percentage increase in quantity sold. Explanation 1. Understand Inelastic Demand Inelastic demand means that the percentage change in quantity demanded is less than the percentage change in price. 2. Analyze Effect of Good Harvest A good harvest increases supply, leading to a lower price. 3. Determine Revenue Impact With inelastic demand, the percentage fall in price is greater than the percentage increase in quantity sold, causing total revenue to decrease.

Explanation

1. Understand Inelastic Demand<br /> Inelastic demand means that the percentage change in quantity demanded is less than the percentage change in price.<br /><br />2. Analyze Effect of Good Harvest<br /> A good harvest increases supply, leading to a lower price.<br /><br />3. Determine Revenue Impact<br /> With inelastic demand, the percentage fall in price is greater than the percentage increase in quantity sold, causing total revenue to decrease.
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