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Imagine that the short-run price elasticity of supply for a farmer's corn is 0.3, while the long-run price elasticity of supply is 2. If prices
Imagine that the short-run price elasticity of supply for a farmer's corn is 0.3, while the long-run price elasticity of supply is 2. If prices for corn fall 30%, what are the short- run and long-run changes in quantity supplied? What are the short-run and long-run changes in quantity supplied if prices rise by 15%? What happens to the farmer's revenues in each of these 4 situations?
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