14. Application: Demand elasticity and agricultureConsider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a spell ofunusually good weather occurs, which enables apple producers to generate more apples per acre of land.Show the effect this shock has on the market for apples 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 backto its original position, just drag it a little farther.20SupplyDemand16SupplyDemand1020304050QUANTITY (Millions of bushels)One of the growers is concerned about the price decrease caused by the spell of good weather because he feels it will lower revenue in this market. Asan economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in thismarket.Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $8 per bushel iswhich meansdemand isbetween these two points. Therefore, you would tell the grower that his claim isbecause total revenuewillas a result of the spell of good weather.PRICE (Dollars per bushel)

Price elasticity of demand depicts how the consumer will respond with the change in price of the…

Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a spell of unusually good weather occurs, which enables apple producers to generate more apples per acre of land. Show the effect this shock has on the market for apples 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 per bushel) 20 16 N 4 0 0 10 Supply 20 Demand 30 QUANTITY (Millions of bushels) 40 50 Demand 0 Supply One of the growers is concerned about the price decrease caused by the spell of good weather because he feels it will lower revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market.

Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a spell of unusually good weather occurs, which enables apple producers to generate more apples per acre of land. Show the effect this shock has on the market for apples 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 per bushel) 20 16 N 4 0 0 10 Supply 20 Demand 30 QUANTITY (Millions of bushels) 40 50 Demand 0 Supply One of the growers is concerned about the price decrease caused by the spell of good weather because he feels it will lower revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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