In the market for beets the following events are taking place. Explain the effect of each single event on demand, supply, the equilibrium price and the equilibrium quantity for parts a) and b), and use the concept of elasticity to answer parts d) -e).

a) The price of beans, a substitute in consumption, increases. Explain which curve will shift, and how the equilibrium price and quantity will change.

b) The cost of farm labour decreases. Explain which curve will shift, and how the equilibrium price and quantity will change.

c) When the price of a pound of beets increases from $5 to $7, consumption drops from 1000 to 500 pounds. Use the midpoint formula to calculate the price elasticity of demand. Is demand elastic or inelastic?

d) Given your results from part d) would revenues for farmers increase or decrease with this increase in prices? How does this relate to elasticity?

e) Why would the demand for beets be elastic for some individuals? Explain, using one of the determinants of price elasticity.