Suppose a decrease in the supply of wheat results in an increase in revenue. This indicates...
Suppose a decrease in the supply of wheat results in an increase in revenue. This indicates that
A) the supply curve for wheat must be vertical.
B) the demand curve for wheat must be vertical.
C) the resulting increase in price is proportionally greater than decrease in quantity sold.
D) the decrease in quantity sold is proportionally larger than the resulting change in price.
Homework Answers
Ans) the correct option is C) the resulting increase in price is proportionally greater than decrease in quantity sold.
Total revenue is price multiplied quantity. If increase in price increases total revenue then the increase in price is greater than the decrease in quantity
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