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. Demand Supply 0 8 16 24 32 40 ++ 40 32 24 16 8 0 PRICE (Dollars per ton) QUANTITY (Thousands of tons) 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 $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 pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement Total Revenue (Thousands of Dollars)
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. Demand Supply 0 8 16 24 32 40 ++ 40 32 24 16 8 0 PRICE (Dollars per ton) QUANTITY (Thousands of tons) 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 $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 pistachio market before and after the technological improvement. Enter these values in the following table. Before Technological Improvement After Technological Improvement Total Revenue (Thousands of Dollars)
Chapter5: Markets In Motion And Price Controls
Section: Chapter Questions
Problem 10P
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Transcribed Image Text: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.
Demand
Supply
0
8
16
24
32
40
++
40
32
24
16
8
0
PRICE (Dollars per ton)
QUANTITY (Thousands of tons)
Transcribed Image Text: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 $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 pistachio market before and after the
technological improvement. Enter these values in the following table.
Before Technological Improvement
After Technological Improvement
Total Revenue (Thousands of Dollars)
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