Homework Help is Here – Start Your Trial Now!
Business
Economics
12. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 20 Supply Demand 16 12 Supply Demand 2 8 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel isv , which means demand is v between these two points. Therefore, you would tell the grower that her claim is because total revenue will as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)

12. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 20 Supply Demand 16 12 Supply Demand 2 8 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel isv , which means demand is v between these two points. Therefore, you would tell the grower that her claim is because total revenue will as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter4: The Market Forces Of Supply And Demand
Section: Chapter Questions
Problem 11PA
See similar textbooks
icon
Related questions
Question

I mostly need help with the total revenue calcualtions at the bottom of the screenshot. If you could also briefly go over the fill in the blank questions too that would be great. I want to understand how those answers are used in the calculation of the total revenue values. Thanks!

12. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 20 Supply Demand 16 O 12 Supply Demand 8 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel is which means demand is between these two points. Therefore, you would tell the grower that her claim is , because total revenue will as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)
Transcribed Image Text:12. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. 20 Supply Demand 16 O 12 Supply Demand 8 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel is which means demand is between these two points. Therefore, you would tell the grower that her claim is , because total revenue will as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)
Expert Solution
Step 1

Price elasticity of demand: - Price elasticity of demand measures the responsiveness of change in demand due to change in its price.

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Economic Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
EBK HEALTH ECONOMICS AND POLICY
EBK HEALTH ECONOMICS AND POLICY
Economics
ISBN:
9781337668279
Author:
Henderson
Publisher:
YUZU
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS