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11 Feb 2019

Suppose that the demand curve for corn is given by the formula Q =100 - 2P.

a) Using the point elasticity formula, what is the price elasticity of demand for corn when the equilibrium quantity demanded in the market is 60 units? Round to the nearest two digits.

b) Suppose that irrigation technology for corn improves so that more corn can be produced from each plot of land using the same amount of labour, and labour is the only variable input in the production of corn. What do you expect will happen to the total revenue earned from sales by corn farmers in the new equilibrium compared to the old one, i.e., is it likely to increase, decrease or stay the same? Why? (Hint: Start by considering how supply and/or demand are affected.)

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Jarrod RobelLv2

13 Feb 2019

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Related questions

Demand curve:

The demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at any given price. It is a graphic representation of a market demand schedule. The demand curve for all consumers together follows from the demand curve of every individual consumer: the individual demands at each price are added together, assuming independent decision-making. Demand curves are used to estimate behaviors in a competitive market and are often combined with supply curves to estimates the equilibrium price. Demand curves are usually considered as theoretical structures that are expected to exist in the real world, but real-world measurements of actual demand curves are difficult and rare.

The demand curve will move downward from the left to the right, which expresses the law of demand.

If the price of corn rises, consumers will have an incentive to buy less corn and substitute other foods, so the total quantity of corn consumers’ demand will fall. The degree to which rising price translates into falling demand is called demand elasticity or price elasticity of demand. If a factor besides price or quantity changes, a new demand curve needs to be drawn. For example, say that the population of an area explodes, increasing the number of mouths to feed. In this scenario, more corn will be demanded even if the price remains the same, meaning that the curve itself shifts to the right.

According to my view, the demand curve for the Apple Video iPod will increase. According to the given paragraph iPod is thinner and lighter. The hardware and software ecosystem offers good content options and also portable. These are the main qualities expected by the customers. Henceforth customer wants to buy this product in the future also. If the price of the product increases in the future the demand for the product also increases because customers demand more products thinking of price increase in the future. At the same time if the price decreases in this case also customers will buy the product because they think that the good product is coming at a reasonable price. The demand curve for Apple Video iPod in the future may be like follows.

What is your opinion on a competitor product which has similar features to that of an i-pad or say it is better than i-pad and is offered at a comparatively cheaper price, how this will affect the i-pad demand curve and why?

bronzemule740

QUESTION 1

The demand for oranges increases while the supply decreases. The equilibrium price of oranges ________, and the equilibrium quantity ________.

		falls; increases
		falls; perhaps changes but we can't say if it increases, decreases, or stays the same
		rises; decreases
		rises; perhaps changes but we can't say if it increases, decreases, or stays the same

1 points

QUESTION 2

Assume a competitive market is in equilibrium. There is an increase in demand, but no change in supply. As a result the equilibrium price ________, and the equilibrium quantity is ________.

		rises; increases
		falls; decreases
		falls; does not change
		rises; does not change

1 points

QUESTION 3

Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

		does not change; does not change
		rises; increases
		falls; decreases
		rises; decreases

1 points

QUESTION 4

If consumers buy a large number of plug-in electric cars, the equilibrium price of electricity will ________ and the equilibrium quantity of electricity will ________.

		rise; increase
		rise; decrease
		fall; increase
		fall; decrease

1 points

QUESTION 5

Which of the following shifts the supply curve for oranges?

		an increase in income for all orange consumers if oranges are a normal good
		disastrous weather that destroys about half of this year's orange crop
		an increase in the price of bananas, a substitute in consumption for oranges
		a newly discovered increase in the nutritional value of oranges

1 points

QUESTION 6

Which of the following shifts the supply curve of rutabagas rightward? (A rutabaga is a potato-like vegetable.)

		normal goods in production.
		an exceptionally cold summer that killed much of the rutabaga crop.
		a fall in the price of fertilizer used to grow rutabagas.
		an increase in the price of a rutabaga

1 points

QUESTION 7

Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to

		an increase in the supply electric cars so that the supply curve shifts rightward.
		an increase in the supply of electric cars so that the supply curve shifts leftward.
		a decrease in the supply of electric cars so that the supply curve shifts rightward.
		a decrease in the supply of electric cars so that the supply curve shifts leftward.

1 points

QUESTION 8

Hot dogs and hot dog buns are complements. If the price of a hot dog falls, then

		the demand for hot dogs will increase.
		the demand for hot dog buns will decrease.
		the quantity demanded of hotdogs will decrease.
		the demand for hot dog buns will increase.

1 points

QUESTION 9

Demand curves slope ________ because as the price increases and other things remain the same, the quantity demanded ________.

		upward; increases
		downward; decreases
		upward; decreases
		downward; increases

1 points

QUESTION 10

Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?

		The quantity of bottled water demanded increases.
		The demand for bottled water increases.
		The quantity of bottled water demanded decreases.
		The demand for bottled water decreases.

1 points

QUESTION 11

If the price of carrots is below the equilibrium price, the

		quantity supplied of carrots exceeds the quantity demanded and a shortage exists.
		quantity demanded of carrots exceeds the quantity supplied and a shortage exists.
		quantity supplied of carrots exceeds the quantity demanded and a surplus exists.
		quantity demanded of carrots exceeds the quantity supplied and a surplus exists.

1 points

QUESTION 12

Which of the following is true regarding demand?
i. Demand is the relationship between quantity demanded and the price of a good when all other influences on buying plans remain the same.
ii. Demand refers to one quantity at one time.
iii. "Demand" and " quantity demanded" are the same thing.

		both i and ii
		i only.
		ii only.
		iii only.

1 points

QUESTION 13

Suppose the current price of a pound of steak is $6 per pound and the equilibrium price is $9 per pound. What takes place?

		There is a shortage, so the price rises and quantity demanded decreases.
		There is a shortage, so the price rises and quantity demanded increases.
		There is a shortage, so the price falls and quantity demanded increases.
		There is a surplus, so the price falls and quantity demanded increases.

1 points

QUESTION 14

The number of corn producers increases, so the supply of corn ________ and the supply curve of corn ________.

		decreases; shifts leftward
		decrease; shifts rightward
		increases; shifts rightward
		increases; shifts leftward

1 points

QUESTION 15

Market equilibrium

i. can never occur because there are always people who want a good but cannot afford it.

ii. occurs at the intersection of the supply and demand curves.

iii. is the point where the price equals the quantity.

		iii only
		ii and iii
		ii only
		i only

1 points

QUESTION 16

Milk can be used to produce cheese or butter. If the price of a pound of butter rises, what happens to the supply of cheese?

		The supply of cheese stays the same and there is a decrease in the quantity supplied of cheese.
		The supply of cheese decreases.
		The supply of cheese stays the same and there is no change in the quantity supplied of cheese.
		The supply of cheese increases.

1 points

QUESTION 17

Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the

		demand for Dell computers decreases.
		demand for Apple computers increases.
		demand for Apple computers decreases.
		demand for Dell computers increases.

1 points

QUESTION 18

Suppose the current price of a pound of steak is $12 per pound and the equilibrium price is $9 per pound. In this case, there is a

		surplus, so the price rises and quantity demanded increases.
		shortage, so the price rises and quantity demanded decreases.
		surplus, so the price falls and quantity demanded increases.
		shortage, so the price falls and quantity demanded increases.

1 points

QUESTION 19

Plywood is used in the construction of houses. If the price of plywood rises, what happens to the supply of houses?

		The supply increases so that the supply curve shifts rightward.
		The quantity supplied increases but there is no shift in the supply curve.
		The supply decreases so that the supply curve shifts leftward.
		The quantity supplied decreases but there is no shift in the supply curve.

1 points

QUESTION 20

In stores, it is common to find seasonal products marked down when the season ends. What explains this behavior?

		The store is trying to increase its customers' demand for the product.
		The law of demand is being used to increase the quantity demanded.
		The store manager must be trying to drive away customers by selling low quality products.
		The store is trying to increase its consumer's incomes by increasing their purchasing power.

1 points

QUESTION 21

Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________ and the equilibrium quantity ________.

		rises; increases
		rises; decreases
		falls; increases
		falls; decreases

1 points

QUESTION 22

If both the supply and demand curves shift simultaneously, we can always predict what will happen to

		either the price or the quantity, but not both.
		only the quantity.
		only the price.
		both the price and the quantity.

1 points

QUESTION 23

If income increases and the demand for bus rides decreases,

		bus rides are a substitute good.
		consumers are behaving irrationally.
		bus rides are an inferior good.
		bus rides are a normal good.

1 points

QUESTION 24

A surplus of cardboard boxes means that

		at the current price of a cardboard box, the quantity demanded equals the quantity supplied and the price will fall to restore the equilibrium..
		the current price of a cardboard box is less than the equilibrium price.
		at the current price of a cardboard box, the quantity demanded exceeds the quantity supplied.
		at the current price of a cardboard box, the quantity demanded is less than the quantity supplied.

1 points

QUESTION 25

If a freeze destroys oranges before they are harvested, the equilibrium price of an orange ________ and the equilibrium quantity ________.

		rises; increases
		rises; decreases
		falls; increases
		falls; decreases

1 points

turquoisedeer344

From the scenario for Katrinaâs Candies, examine the procedure Herb will use to estimate the "demand model" for this product and comment on the expected price elasticity, income elasticity, and cross price elasticity of demand. That is, do you expect demand to be price elastic or inelastic? Will the income elasticity suggest Katrina Candies is a luxury or a necessary good? And, is there likely to be a strong cross price elasticity with the other products that Herb included in his demand model? Explain your answers. What can you determine about consumer demand for a product whose estimated demand elasticities are as follows: Price Elasticity of demand is -0.85 Income Elasticity of demand is 2.5 Cross Price Elasticity of demand with this product and your product is -2 I would like you to think about this simple formula for predicting the change in total revenue when there is a given percentage change in price. Using the example above, if ED (price elasticity of demand) is -.85, then a 10% increase in price will cause the quantity demanded to fall by 8.5%, (-8.5% / 10% = -.85). The Formula for Predicting % Changes in Total Revenue is: %ÎTR = %ÎQ + %ÎP where TR = Total Revenue, Q is Quantity Demanded and P = price. Using this formula, what would be the % Î in TR if ED is -.85 and the %ÎP is 10%?