If Demand for Farm Crops Is Inelastic, a Good Harvest

question 355

Multiple Choice

If demand for farm crops is inelastic, a good harvest will cause farm revenues to

• A)increase because of the increase in the quantity that farmers can sell.
• B)increase because of a downward movement along the supply curve, encouraging an increase in demand.
• C)decrease because of a percentage fall in price that is greater than the percentage increase in quantity sold.
• D)remain unchanged, because the increase in quantity that can be sold will be matched by an equal decrease in price.

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Definitions:

Private Costs

The costs that are incurred by an individual or a company when producing goods or services.

Bystanders

Individuals who are present at an event or incident but do not take part in it, often discussed in the context of emergency situations or accidents.

Congestion Toll

A fee charged to drivers who use certain roads during peak periods, intended to reduce traffic congestion by discouraging the use of those routes.

Internalizing

The process of absorbing or taking in information, values, or costs, often used when discussing the incorporation of external costs into market prices.