The following graph illustrates the market for walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose a stretch of unseasonably good weather occurs, allowing walnut growers to produce more walnuts per hectare. Show the effect this shock has on the market for walnuts 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 ton) 30 24 12 10 0 10 20 30 QUANTITY (Thousands of tons) Demand Supply 40 Total Revenue (Thousands of Dollars) 50 Demand Supply A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to decreased 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 walnuts between the price levels of $15 and $9 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 favorable weather conditions. Confirm your previous conclusion by calculating total revenue in the walnut market before and after the favorable weather conditions. Enter these values in the following table. Before Favorable Weather Conditions After Favorable Weather Conditions
The following graph illustrates the market for walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose a stretch of unseasonably good weather occurs, allowing walnut growers to produce more walnuts per hectare. Show the effect this shock has on the market for walnuts 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 ton) 30 24 12 10 0 10 20 30 QUANTITY (Thousands of tons) Demand Supply 40 Total Revenue (Thousands of Dollars) 50 Demand Supply A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to decreased 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 walnuts between the price levels of $15 and $9 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 favorable weather conditions. Confirm your previous conclusion by calculating total revenue in the walnut market before and after the favorable weather conditions. Enter these values in the following table. Before Favorable Weather Conditions After Favorable Weather Conditions
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 walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose stretch
of unseasonably good weather occurs, allowing walnut growers to produce more walnuts per hectare.
Show the effect this shock has on the market for walnuts 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 ton)
30
8
24
18
6
0
0
10
20
30
QUANTITY (Thousands of tons)
Demand
Supply
40
Total Revenue (Thousands of Dollars)
50
Demand
Supply
(?)
A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to
decreased 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 walnuts between the price levels of $15 and $9 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 favorable weather conditions.
Confirm your previous conclusion by calculating total revenue in the walnut market before and after the favorable weather conditions. Enter these
values in the following table.
Before Favorable Weather Conditions After Favorable Weather Conditions
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