Question

I am a little confused by the concept if supply goes down for a good with an Inelastic demand curve then can I

always assume that just because the supply went down….. then the price will go up is that always the case?? so I think the answer is b.  an Inelastic demand for oil/gas and a reduction in the amount of oil supplied is that right?  I had a similar question about Bananas but in that case the demand for Bananas was Elastic see below 

OPEC successfully raised the world price of oil in the 1970s and early 1980s, primarily due to

a. a reduction in the amount of oil supplied and a world-wide oil embargo.

b. an inelastic demand for oil and a reduction in the amount of oil supplied.

c. a reduction in the amount of oil supplied and an elastic demand for oil.

d. a world-wide oil embargo and an elastic demand for oil.

In this Question they are asking about total Revenue …. I think the answer is c.  There is not enough information  but I also think revenue is likely to decrease because an increase in Price could have a significant reduction of quantity sold so it could be answer b

If the demand for bananas is elastic, then an increase in the price of bananas will

a. not change total revenue of banana sellers.

b. decrease total revenue of banana sellers.

c. There is not enough information to answer this question.

d. increase total revenue of banana sellers.

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