The following graph illustrates the market for walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose a stretchof 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 backto its original position, just drag it a little farther.PRICE (Dollars per ton)302418600122436DemandQUANTITY (Thousands of tons)Supply4860DemandSupply 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 todecreased 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 isthese two points, demand isThus, you can conclude that the grower's claim isdue to the favorable weather conditions., meaning that betweenbecause total revenue willConfirm your previous conclusion by calculating total revenue in the walnut market before and after the favorable weather conditions. Enter thesevalues in the following table.Total Revenue (Thousands of Dollars)Before Favorable Weather Conditions After Favorable Weather Conditions

Price elasticity of demand: It measures the percentage change in the quantity demanded for a 1%…

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 2 6 0 0 12 24 I 36 Supply Demand 48 60 Demand Supply ?

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 2 6 0 0 12 24 I 36 Supply Demand 48 60 Demand Supply ?

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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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…
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 18 12 6 0 0 12 24 36 Demand QUANTITY (Thousands of tons) Supply 48 60 Demand Supply
In the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases Answer/ Demand increases - Curve shifts right - Price of substitutes 1. Pepsi - The price of Coke decreases dramatically. 2. Steak - Incomes fall due to the recession 3. Hair dye - Hair dye is successfully advertised in the media. 4. Computer software - The price of computers goes down.
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In the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases EXAMPLE ANSWER/ Demand increases - Curve shifts right - Price of substitutes Salt - The price of salt doubles. 2. Sunscreen - Summer approaches. 3. Big Macs - The population in the United States increases by 20%. 4. Rock Salt - It snows 8 inches over night
In the following scenarios, you will be given a product and an event. Determine what will happen to the demand for the product based on the event, what happens to the demand curve, and give the non-price determinant that caused it to occur. (chose from the 7 determinants listed in the notes). The first one is answered for you as an example. EXAMPLE/ Product - Hamburgers Event - The price of steak increases EXAMPLE ANSWER/ Demand increases - Curve shifts right - Price of substitutes Rock Salt - It snows 8 inches over night
Suppose the National Institute of Health publishes a study finding that coffee drinking reduces the probability of getting colon cancer. How do you imagine this will affect the market for coffee? Which determinant of demand or supply is being affected? Show graphically with before and after curves on the same axes. How will this change affect the equilibrium price and quantity of coffee? Explain your reasoning.
The following graph plots the market for scones in Dallas, where you can assume there are always over 1,000 bakeries. Suppose the number of bakeries increases significantly. Show the effect of this change on the market for scones by shifting one or both of the curves on the following graph, holding all else constant. 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 perscone) QUANTITY (Scones) Supply Demand Demand -0 Supply ?