14. Application: Demand elasticity and agriculture The following graph illustrates the market for pistachios. It plots the monthly supply of pistachios and the monthly demand for pistachios. 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 pistachios 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 perton) 24 18 2 bo D 0 12 24 QUANTITY (Thousands of tons) Demand 48 Supply ✓due to the technological improvement. Total Revenue (Thousands of Dollars) 60 Demand 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. Supply Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $15 and $9 per ton is ▼. Thus, you can conclude that the grower's claim is between these two points, demand is meaning that because total revenue will Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement
14. Application: Demand elasticity and agriculture The following graph illustrates the market for pistachios. It plots the monthly supply of pistachios and the monthly demand for pistachios. 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 pistachios 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 perton) 24 18 2 bo D 0 12 24 QUANTITY (Thousands of tons) Demand 48 Supply ✓due to the technological improvement. Total Revenue (Thousands of Dollars) 60 Demand 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. Supply Using the midpoint method, the price elasticity of demand for pistachios between the price levels of $15 and $9 per ton is ▼. Thus, you can conclude that the grower's claim is between these two points, demand is meaning that because total revenue will Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:14. Application: Demand elasticity and agriculture
The following graph illustrates the market for pistachios. It plots the monthly supply of pistachios and the monthly demand for pistachios. 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 pistachios 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 perton)
30
24
18
2
6
0
0
12
24
36
QUANTITY (Thousands of tons)
Demand
Supply
48
Total Revenue (Thousands of Dollars)
60
Demand
Supply
Ⓒ
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 pistachios between the price levels of $15 and $9 per ton is
between these two points, demand is
▼. Thus, you can conclude that the grower's claim is
due to the technological improvement.
, meaning that
because total revenue will
Confirm your previous conclusion by calculating total revenue in the pistachio market before and after the technological improvement. Enter these
values in the following table.
Before Technological Improvement After Technological Improvement
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