Calculate the price elasticity of demand for winter wheat

Assignment Help Microeconomics
Reference no: EM131574936

Problem -

US winter wheat production increased dramatically in 1999 after a bumper harvest.  The supply curve shifted rightward; as a result, the price decreased and the quantity demanded increased (a movement along the demand curve). The accompanying table describes what happened to prices and the quantity of wheat demanded.

 

1998

1999

Quantity Demanded (bushels)  

1.74 Billion

1.9 Billion

(Average Price (per bushel)

$3.70

$2.72

Using the chart, solve the following questions:

a) Using the midpoint method, calculate the price elasticity of demand for winter wheat.

b) What is the total revenue for US wheat farmers in 1998 and 1999?

c) Did the bumper harvest increase or decrease the total revenue for American wheat farmers? How could you have predicted this from your answer to part a?

Reference no: EM131574936

Questions Cloud

Describe the mission statement of each organization : Describe at least three (community, state, or national) organizations that are committed to improving access to healthcare for women and minorities.
What impact does an increase in income : What impact does an increase in income(M) have on the equilibrium price and quantity of good x?(Increase, decrease, uncertain). Explain
Collect information using a sample or a population : Statistics 201 is a course taught at a university. Professor Rauch has taught nearly 1,500 students in the course over the past 5 years.
Summarize three different reimbursement methods : "The complexity of financing in health care is one of the primary characteristics of medical care delivery in the United States" .
Calculate the price elasticity of demand for winter wheat : Using the chart, solve the following questions: Using the midpoint method, calculate the price elasticity of demand for winter wheat
Find an infinite set of input instances of max-sat : Find an infinite set of input instances of MAX-SAT for which the expected solutions computed by RSAM are better than the expected solutions computed by RRR.
Solve for the best response functions for each rm : Two firms compete via price competition in a market with differentiated products. Solve for the best response functions for each rm
Find the law in your state that deals with offenses : Find the law in your state that deals with offenses against the person, defenses, and the use of deadly force. Are these concepts statutorily defined
Minimize the overall weight of the vertex cover : Consider the weighted MIN-VC, where every vertex has been assigned a positive integer weight, and the task is to minimize the overall weight.

Reviews

Write a Review

Microeconomics Questions & Answers

  What would likely be the best entry mode

We typically focus on firms from well-developed economies entering markets of less developed economies. Do firms from less developed economies have a chance of success if they enter developed markets such as the United States What competitive adva..

  Write the estimated demand function

write the estimated demand function (with only P as the independent variable), inverse demand function, and marginal revenue (MR) function.

  Present worth on incremental investment

It is estimated that the annual heat-loss cost in a small power plant is $5,200. Two mutually exclusive proposals have been formulated that will reduce the loss. Proposal A will reduce heat loss by 60% and cost $3,000.

  What is the total gain to the housekeeper from migrating

A housekeeper from the Philippines is contemplating immigrating to Singapore in search of higher wages. Suppose the housekeeper earns approximately $2,000.

  Compared between monopoly and perfect competitive market

Compared between monopoly and perfect competitive market, there is no deadweight loss in the latter one, so the market is claimed to be the most (static) efficient. What is deadweight loss? Why the standard theory says it is bad to society? Now, DWL ..

  Why the firm is better off producing that quantity where mr

The profit maximization rule for a perfectly competitive firm states that the perfectly competitive firm will maximize its profits when it produces that quantity where marginal revenue

  Growth influence the level of gdp per person

How does the rate of population growth influence the level of GDP per person?

  What is cohort effect? how to disentangle the pure effect

What is Cohort Effect? How to disentangle the "pure" effect of age from a birth cohort effect?

  Price elasticity of demand for stock

Price elasticity of demand for stock is 1.5. This means that foe every 10% increase in stock prices, the quantity demanded will decline by 15 %. Does this make sense? Explain.

  Calculate the number of moles of gas

Calculate the number of moles of gas added to the container.

  Calculate the profit-maximizing production quantity

A firm has a monopoly on a new type of gaming console. The market demand is given by P=175.3-0.003*Q and thus marginal revenue is MR=175.3-0.006*Q. The monopolist's marginal cost is MC=5.2+0.001*Q. Calculate the profit-maximizing production quantity.

  Which ones do you think do not need to be revised

Do you think should be revised the most during a job redesign intervention? Which ones do you think do not need to be revised? Explain your reasoning and cite some of the required readings in your answer.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd