economics help???? price inelastic question?

V

Vineeta

New member
If the demand for farm products is price inelastic, a good harvest will cause farm revenues to


1. increase.
2. decrease.
3. be unchanged.
4. either increase or decrease, depending on what happens to supply.
 
It has been a while since business school, but I would say either increase or decrease depending on supply. A good harvest only tells you that you have the crops it does not mean people are buying the crops or taking into account other variables such as the crop being destroyed by nature.
 
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