5. Law of Demand Suppose that business travelers and vacationers have the following demand for airline tickets from New York to Boston: Price Quantity Demanded by Business Travelers Quantity Demanded by Vacationers (Dollars) (Tickets) (Tickets) 150 2,100 1,000 200 2,000 800 250 1,900 600 300 1,800 400 As the price of tickets rises from $200 to $250, the price elasticity of demand for business travelers is , and the price elasticity of demand for vacationers is , using the midpoint method. Therefore, the demand for airline tickets in this price range is _ elastic for vacationers because business travelers are _ sensitive to changes in price. Grade It Now Save & Continue Continue without savingCENGAGE | MINDTAP Q Search this course Module Three Quiz X 4. Application: Demand elasticity and agriculture Consider the market for soybeans. The following graph shows the weekly demand for soybeans and the weekly supply of soybeans. Suppose a blight occurs that destroys a significant portion of soybean crops. Show the effect this shock has on the market for soybeans 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. 10 O Demand 8 Supply Supply PRICE (Dollars per bushel) Demand 2 16 24 32 40 QUANTITY (Millions of bushels)CENGAGE MINDTAP Q Search this course Module Three Quiz O X Supply 6 Supply PRICE (Dollars per bushel) Demand 2 16 24 32 40 QUANTITY (Millions of bushels) One of the growers is excited by the price increase caused by the blight because she believes it will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for soybeans between the prices of $5 and $7 per bushel is , which means demand is between these two points. Therefore, you would tell the grower that her claim is , because total revenue will as a result of the blight. Confirm your previous conclusion by calculating total revenue in the soybean market before and after the blight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars)