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Demand elasticity

Demand elasticity

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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4. 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 affact this shock has on the market for almonds by shifting the demand curva, supply curva, 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 loro 24 0 A QUANTITY (Thousands oftons) Demand Supply 12 Total Revenue (Thousands of Dollars) Demand Supply (?) Several growers are happy with this advancement in technology because now they can sell more crops, which they belleve 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 these two points, demand is Thus, you can conclude that the grower's claim is due to the technological Improvement. meaning that between , because total revenue 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 Before Technological Improvement After Technological Improvement
Transcribed Image Text:4. 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 affact this shock has on the market for almonds by shifting the demand curva, supply curva, 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 loro 24 0 A QUANTITY (Thousands oftons) Demand Supply 12 Total Revenue (Thousands of Dollars) Demand Supply (?) Several growers are happy with this advancement in technology because now they can sell more crops, which they belleve 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 these two points, demand is Thus, you can conclude that the grower's claim is due to the technological Improvement. meaning that between , because total revenue 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 Before Technological Improvement After Technological Improvement
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