Remembering the learning activity in Unit 3, the Gondwanaland chairman of production reported that the gosum berry growers could meet a demand of 700 barrels of gosum berries per month at a price of $70 per barrel. Then the growers were plagued with a gosum berry bug infestation that reduced output, causing production to fall to only 600 barrels. This resulted in a price increase to $84 per barrel. The following table shows the chairman’s report: Month Monthly barrels of gosum berries demanded Price per barrel June 700 $70 July 600 $84 Using the midpoint method, show your work and calculate the price elasticity of demand for Gondwanaland gosum berries. Explain what this price elasticity of demand means? Complete the table below by calculating what the monthly total revenue is for June, what the monthly total revenue is for July, and the change in total monthly revenue for these two months. How have these numbers changed? (Enter your response here.) Month Monthly barrels of gosum berries demanded Price per barrel Monthly total revenue (Enter Totals Below) June 700 $70 (Enter monthly total revenue here) July 600 $84 (Enter monthly total revenue here) Change in monthly total revenue: (Enter change in monthly total revenue here.) Using your answer to part a. above, how could you have predicted the change in monthly total revenue that you found in part b. above? (Enter your response here.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Remembering the learning activity in Unit 3, the Gondwanaland chairman of production reported that the gosum berry growers could meet a demand of 700 barrels of gosum berries per month at a price of $70 per barrel.

Then the growers were plagued with a gosum berry bug infestation that reduced output, causing production to fall to only 600 barrels. This resulted in a price increase to $84 per barrel. The following table shows the chairman’s report:

Month	Monthly barrels of gosum berries demanded	Price per barrel
June	700	$70
July	600	$84

Using the midpoint method, show your work and calculate the price elasticity of demand for Gondwanaland gosum berries. Explain what this price elasticity of demand means?

Complete the table below by calculating what the monthly total revenue is for June, what the monthly total revenue is for July, and the change in total monthly revenue for these two months. How have these numbers changed?

(Enter your response here.)

Month	Monthly barrels of gosum berries demanded	Price per barrel	Monthly total revenue (Enter Totals Below)
June	700	$70	(Enter monthly total revenue here)
July	600	$84	(Enter monthly total revenue here)
			Change in monthly total revenue: (Enter change in monthly total revenue here.)

Using your answer to part a. above, how could you have predicted the change in monthly total revenue that you found in part b. above?

(Enter your response here.)

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