When the price of corn was low consumers in the United State

When the price of corn was \"low,\" consumers in the United States spent a total of $8 billion annually on its consumption. When the price halved, consumer expenditures actually DECREASED to $6 billion annually. This indicates that:

Solution

As price of corn decreased, total expenditure by consumers (equals total revenue for firms) decreased.

This signifies that demand for corn is inelastic. When demand is inelastic, a price reduction results in a proportionately lower increase in quantity demanded. So total revenue falls.