a. When the wheat harvest falls by 10 percent due to bad weather, wheat prices go up
Question:
a. When the wheat harvest falls by 10 percent due to bad weather, wheat prices go up 40 percent. What is the price elasticity of demand for wheat?
b. Using this number, what will happen to the wheat bought by consumers if the government raises the price of wheat by 20 percent? What happens to the total revenue of wheat farmers?
c. Still using the elasticity from
(a) above, what will happen to the price of wheat if the government destroys 10 percent of the crop?
To the total revenues of wheat farmers?
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a 025 10 percent40 percent b It will decrea...View the full answer
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