Question

Explain why the following might be true a drought around the would raises the total revenue that farmers receive from the sale of grain but a drought Only in kansas reduce the total revenue that Kansas farmers receive

Answer 1

Answer:

The drought if caused in the world, it makes the curve of supply to shift in left direction. The demand is inelastic in nature causes the rise in the price. So this is the reason why there is rise in the total revenue that farmers receive from the sale of grain.

But the drought only in kansas reduces the total revenue that Kansas farmers receive. This is because there is no shift in the curve of supply. There is rise in the price and they have to sell the less produced grain in less amount.