A potato farmer in Alamosa, Colorado, would be likely to have which type of demand for his potato crop?
A. Inelastic demand
B. No demand; everyone buys potatoes from Idaho
C. Elastic demand
D. Unitary elasticity of demand
E. All of the above
Answer: (C) is the correct answer. The farmer's crop would most likely be elastic. If the farmer dropped his price, more people would buy his potatoes. Potatoes are a commodity where people shop for the "best buy." (A) is incorrect because the total revenue would, in all likelihood, increase, not decrease, with a price reduction. (B) is incorrect because people shopping for potatoes are price conscious and shop for the least expensive. (D) is incorrect because the total revenue would not stay the same with an increase or decrease in price for this type of product. (E) cannot be true because demand must be elastic, inelastic, or have unitary elasticity.