Question

Between 1950 and​ 2017, the price of wheat fell dramatically from​ $19.23 per bushel to​ $3.85 per bushel. Suppose between 1950 and​ 2017, the supply of wheat increased substantially due to increases in​ productivity, shifting the wheat supply curve to the right. With this supply​ shift, the amount by which the price of wheat falls will be larger the more inelastic elastic the demand for wheat..

In addition, assume that between 1950 and 2006 the income of the average American increased substantially and that wheat is a normal good.
With this increase in income.
A) the price of wheat will be unaffected.
B) the amount by which the price of wheat rises will be smaller the higher the income elasticity of wheat.
C) the amount by which the price of wheat falls will be larger the lower the income elasticity of wheat.
D) the amount by which the price of wheat falls will be smaller the lower the income elasticity of wheat.
E) the amount by which the price of wheat rises will be smaller the lower the income elasticity of wheat.

Answer 1

d

Step-by-step explanation:

the amount by which the price of wheat falls will be smaller the lower the income elasticity of wheat. So, that´s why the income elasticity of wheat is for.