Increased output will cause farmers' revenue to decrease when market demand is?

SucceyAsher

3 years ago

A is correct.
Demand is Elastic is when a little change in price results in a greater change in quantity demanded.

If the farmer increases the price of his products a little bit, consumer demands may fall But that is when MARKET DEMAND IS ELASTIC. if market demand for his product is Inelastic he can increase price.

in general Farm products are Inelastic in nature cos they are essential goods. you can't do without them.

Deepthinker581

4 years ago

I thought this answer should be B

colikstan

3 years ago

B is correct
An increase in output would decrease the sales revenue of a producer where demand is price inelastic. The explanation is as follows:
(i) An increase in output, grven demand, will reduce the price and increase the quantity demanded.
(ii) If demand is price inelastic, the increase in the quamitx demanded will be proportionately smaller than the reduction in the price.
(iii) Therefore sales revenue will decrease.

SalCR7

1 year ago

Please the correct answer is meant to be B and not A. Check for corrections