14. Application: Demand elasticity and agriculture The following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose new gathering technology is invented, allowing growers to produce more crops using the same amount of resources. Show the effect this shock has on the market for almonds 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. PRICE (Dollars per ton) 40 Demand 32 Supply Supply 16 8 0 0 12 24 36 QUANTITY (Thousands of tons) Demand 48 60 ? Several growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for almonds between the price levels of $20 and $12 per ton is , meaning that between these two points, demand is Thus, you can conclude that the grower's claim is , because total revenue will due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the almond market before and after the technological improvement. Enter these values in the following table. Total Revenue (Thousands of Dollars) Before Technological Improvement After Technological Improvement
14. Application: Demand elasticity and agriculture The following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose new gathering technology is invented, allowing growers to produce more crops using the same amount of resources. Show the effect this shock has on the market for almonds 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. PRICE (Dollars per ton) 40 Demand 32 Supply Supply 16 8 0 0 12 24 36 QUANTITY (Thousands of tons) Demand 48 60 ? Several growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to determine whether this price change will lead to a rise or fall in total revenue in this market. Using the midpoint method, the price elasticity of demand for almonds between the price levels of $20 and $12 per ton is , meaning that between these two points, demand is Thus, you can conclude that the grower's claim is , because total revenue will due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the almond market before and after the technological improvement. Enter these values in the following table. Total Revenue (Thousands of Dollars) Before Technological Improvement After Technological Improvement
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:14. Application: Demand elasticity and agriculture
The following graph illustrates the market for almonds. It plots the monthly supply of almonds and
the monthly demand for almonds. Suppose new gathering technology is invented, allowing growers
to produce more crops using the same amount of resources.
Show the effect this shock has on the market for almonds 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.
PRICE (Dollars per ton)
40
Demand
32
Supply
Supply
16
8
0
0
12
24
36
QUANTITY (Thousands of tons)
Demand
48
60
?
Several growers are happy with this advancement in technology because now they can sell more
crops, which they believe will lead to increases in revenue. Using elasticities, you will be able to
determine whether this price change will lead to a rise or fall in total revenue in this market.
Using the midpoint method, the price elasticity of demand for almonds between the price levels of
$20 and $12 per ton is , meaning that between these two points, demand is
Thus, you can conclude that the grower's claim is
, because total revenue
will
due to the technological improvement.
Confirm your previous conclusion by calculating total revenue in the almond market before and
after the technological improvement. Enter these values in the following table.
Total Revenue (Thousands of
Dollars)
Before Technological
Improvement
After Technological
Improvement
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education