Suppose That the Price of Peanuts Falls from $3 to $2

question 122

Multiple Choice

Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a result, the total revenue received by peanut farmers changes from $16 to $14 billion. Thus,

• A) the demand for peanuts is elastic.
• B) the demand for peanuts is inelastic.
• C) the demand curve for peanuts has shifted to the right.
• D) no inference can be made as to the elasticity of demand for peanuts.

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Definitions:

Pressure

The force exerted by something against a surface, usually measured in units such as Pascal (Pa) or pounds per square inch (psi).

Basaltic Lava

A type of lava originating from the mantle, characteristically dark and rich in magnesium and iron, with low viscosity.

Shield Volcano

A shield volcano is a type of volcano with broad, gently sloping sides and nearly circular base, formed by the eruption of low-viscosity lava that can flow a great distance from the vent.

Scoria Cone

A small volcanic cone made up of basaltic lava fragments and ash, typically created during explosive eruptions.