What happens to total revenues from oranges due to freeze

Reference no: EM13697619

Suppose the demand for oranges in the U.S. is: P = 5.35 - .012 Q

Where Q is the quantity demanded for oranges in the U.S. (measured in millions of boxes per year) and P is the price per box.

Suppose the current price of oranges is $3 per box. A deep freeze comes through a wipes out part of the Florida orange crop, raising the price of oranges to $3.25 per box.

a) Using the midpoint formula, what is the elasticity of demand for oranges at $3 per box?

b) What happens to total revenues from oranges due to the freeze? why?

Reference no: EM13697619

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