The Price Elasticity of Demand for Corn Is 0

question 72

Multiple Choice

The price elasticity of demand for corn is 0.4. A new hybrid of corn is discovered and all farmers start to use it, which increases the quantity of corn they can produce from each acre. What happens to the farmers' total revenue?

• A) The total revenue will increase.
• B) The total revenue will decrease.
• C) The total revenue will not change.
• D) There is not enough information to determine what happens to the total revenue.

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Definitions:

Probability Distribution

A mathematical function representing the complete set of possible values and their chances of occurrence for a random variable within a certain limit.

Binomial Random Variable

A type of random variable that arises from processes that consist of a fixed number of trials, each of which leads to a binary outcome (success or failure).

Variance

A measure of the dispersion or spread of a set of data points around their mean.

Standard Deviation

An indicator of the degree of spread or variability among a collection of numbers.