Whenthe supply of wheat decreases and the result is an increase in revenue, you

Question

Whenthe supply of wheat decreases and the result is an increase in revenue, you can conclude that 0 A, the supply of wheat curve must be vertical O B. the decrease in percentage quantity sold is proportionately larger than the resulting percentage change in price C. the demand for wheat curve must be vertical. O D. the percentage change in price is greater than percentage decrease in quantity sold Click to select your answer good A is elastic. centage change in demand is greater than the percentage change in price.

Explanation / Answer

When the demand is inealstic a rise in the prices will increase the total revenue. So here the decrease in the supply is the leftward shift of the supply curve and when the supply shifts to the left the price raises. And if the demand is inelastic, the rise rise in the prices would lead to increase in the total revenue. A perfectly inelastic demand curve will be a vertical one.

Ans: The demand for the wheat curve must be vertical.

On the other hand if the supply is inelastic, a reduction in supply will not influence the price.

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