Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. 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. 20 Supply Demand 16 12 Supply Demand 6 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase 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. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel is , which means demand is between these two points. Therefore, you would tell the grower that her claim is because total revenue will v as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)
Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs that destroys a significant portion of apple crops. 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. 20 Supply Demand 16 12 Supply Demand 6 10 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase 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. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel is , which means demand is between these two points. Therefore, you would tell the grower that her claim is because total revenue will v as a result of the blight. Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars) PRICE (Dollars per bushel)
Chapter3: Supply And Demand: Theory
Section: Chapter Questions
Problem 10QP
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I mostly need help with the total revenue calculations at the bottom of the screenshot. If you could also briefly go over the fill in the blank questions too that could be great. I want to understand how those answers are used in the calculation of the total revenue values. Thanks!
Transcribed Image Text:Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose a blight occurs
that destroys a significant portion of apple crops.
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.
(?
20
Supply
Demand
16
12
Supply
Demand
2
6
8
10
QUANTITY (Millions of bushels)
One of the growers is excited by the price increase caused by the blight because she believes it will increase 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.
Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $12 per bushel is
, which means
demand is
v between these two points. Therefore, you would tell the grower that her claim is
, because total revenue
will
v as a result of the blight.
Confirm your previous conclusion by calculating total revenue in the apple market before and after the blight. Enter these values in the following table.
Before Blight
After Blight
Total Revenue (Millions of Dollars)
PRICE (Dollars per bushel)
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