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.
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.
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Question
For the first blue blank, answer options are 0.33, 0.67, 1.33, or 1.5
For the second blue blank, answer options are elastic, inelastic, unit elastic
For the third blue blank, answer options are correct or incorrect
For the fourth blue blank, asnswer options are decrease or increase
Transcribed Image Text: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
between these two points, demand is
Thus, you can conclude that the grower's claim is
due to the technological improvement.
, meaning that
because total revenue will
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.
Total Revenue (Thousands of Dollars)
Before Technological Improvement After Technological Improvement
Transcribed Image Text:4. Application: Demand elasticity and agriculture
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
to its original position, just drag it a little farther.
PRICE (Dollars per ton)
40
Z
0
12
24
36
Demand
QUANTITY (Thousands of tons)
Supply
48
60
Demand
Supply
(?)
snaps back
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