Question

12. Problems and Applications Q12 A drought around the world reduces the total revenue that farmers receive from the sale of grain if demand is . Why would a drought only in Kansas most likely reduce the total revenues that Kansas farmers receive? A drought in Kansas is not significant enough to affect the worldwide price of grain. A drought in Kansas would significantly lower the worldwide price of grain. A drought in Kansas would significantly raise the worldwide price of grain.

Answer 1

Elastic

A drought in Kansas would significantly raise the worldwide price of grain

Step-by-step explanation:

Elastic demand means that quantity demanded is sensitive to price changes. If there's a small change in price, there's a greater change in quantity demanded.

If there's a drought in kansas, the amount of grains produced would fall. This would make grains scarce and increase the price of grain. If the elasticity of demand for grain is elastic, the price increase would lead to a reduction in quantity demanded. As a result, the revenue received by farmers would fall.

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