Suppose the Price Elasticity of Demand for Blueberries Is 1

question 180

Multiple Choice

Suppose the price elasticity of demand for blueberries is 1.5. If climate change destroys one-fourth of the nation's blueberry crop, how will that affect total revenue, all other things unchanged?

• A) Total revenue will rise.
• B) Total revenue will fall.
• C) Total revenue will remain unchanged.
• D) The information is insufficient to answer the question.

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Definitions:

Government Regulations

The laws and rules established by governments to control or guide specific economic activities or markets.

Lending Standards

The set of criteria used by banks and financial institutions to determine the creditworthiness and eligibility of prospective borrowers.

Competitive Markets

Markets characterized by many buyers and sellers where no single participant can significantly influence the price of goods or services.

Externalities

Effects of a transaction or activity on third parties who are not directly involved, which can be either beneficial (positive externalities) or harmful (negative externalities).