14. Application: Demand elasticity and agricultureThe following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose anincrease in pests destroys a major portion of almond trees.Show the effect this shock has on the market for almonds 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)2418004812SupplyDemandQUANTITY (Thousands of tons)Total Revenue (Millions of Dollars)1620DemandSupply(?)One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased revenue. Using elasticities, youwill 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 almonds between the price levels of $15 and $18 per ton is, meaning thatbetween these two points, demand is. Thus, you can conclude that the grower's claim is, because total revenue willdue to the pestilence.Confirm your previous conclusion by calculating total revenue in the almond market before and after the pestilence. Enter these values in the followingtable.Before Pestilence After Pestilence

We have given the market demand curve for almonds and the market supply curve for almonds.…

The following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose an increase in pests destroys a major portion of almond trees.

The following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose an increase in pests destroys a major portion of almond trees.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: The price of coffee rose sharply last month, while the quantity sold remained the same. Five people...

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

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14. Application: Demand elasticity and agriculture
The following graph illustrates the market for almonds. It plots the monthly supply of almonds and the monthly demand for almonds. Suppose an
increase in pests destroys a major portion of almond trees.
Show the effect this shock has on the market for almonds 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)
24
18
0
0
4
8
12
Supply
Demand
QUANTITY (Thousands of tons)
Total Revenue (Millions of Dollars)
16
20
Demand
Supply
(?)
One of the growers is pleased with the price increase caused by the pests because she believes it will lead to increased 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 almonds between the price levels of $15 and $18 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 pestilence.
Confirm your previous conclusion by calculating total revenue in the almond market before and after the pestilence. Enter these values in the following
table.
Before Pestilence After Pestilence

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