9. 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 an increase in pests destroys a major portion of almond trees. 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.

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9. 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 an
increase in pests destroys a major portion of almond trees.
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 (Delars per tor
G
Supply
O
Demand
Supply
@
4
Transcribed Image Text:9. 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 an increase in pests destroys a major portion of almond trees. 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 (Delars per tor G Supply O Demand Supply @ 4
One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased 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 $28 per ton is
between these two points, demand is
Thus, you can conclude that the grower's claim is
due to the pestilence.
Confirm your previous conclusion by calculating total revenue in the almond market before and after the pestilence. Enter these values in the following
table.
Total Revenue (Thousands of Dollars)
Before Pestilence After Pestilence
meaning that
because total revenue will
D
Transcribed Image Text:One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased 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 $28 per ton is between these two points, demand is Thus, you can conclude that the grower's claim is due to the pestilence. Confirm your previous conclusion by calculating total revenue in the almond market before and after the pestilence. Enter these values in the following table. Total Revenue (Thousands of Dollars) Before Pestilence After Pestilence meaning that because total revenue will D
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