Answer to Question #62756 in Microeconomics for Ash

Question

A storm destroys half the banana crop. Is this event more likely to hurt banana farmers if the demand for bananas is very elastic or very inelastic?

Answer 1

This event will hurt banana farmers if the demand for bananas is very elastic. The reason is the farmers will increase price for bananas. So, in the case of very elastic demand the consumers will buy much less bananas than earlier. If the demand for bananas is very inelastic it will slightly change under the price rising.