The price elasticity of demand between points C and D is approximately 1.
For price to increase the total revenue must be inelastic. Reason why the product would need to be inelastic is for the soul fact that when you have an elastic product the price goes up but also you have a bigger chance of having a shortage of demand.
The second question for the first blank 1 and the second blank will be 7 bushels per month to compensate for the elastic price of the bushels
Feb 20th, 2015
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