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. (?) 30 O Demand 24 Supply Supply PRICE (Dollars perton) 12 Demand 0 12 24 36 48 60 QUANTITY (Thousands of tons) A number of the growers are concerned about the price decrease initiated by the stretch of favorable weather conditions, as they believe it will lead to decreased 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 cashews between the price levels of $15 and $9 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 favorable weather conditions. Confirm your previous conclusion by calculating total revenue in the cashew market before and after the favorable weather conditions. Enter these values in the following table. Before Favorable Weather Conditions After Favorable Weather Conditions Total Revenue (Thousands of Dollars)Attempts 0.5 Keep the Highest 0.5 / 2 6. Law of Demand 2 Suppose that your demand schedule for pizza is as follows: Price Quantity of Pizzas Demanded Quantity of Pizzas Demanded ( Dollars) (Income = $20,000) (Income = $24,000) 8 40 50 10 32 45 12 24 30 14 16 20 16 8 12 Using the midpoint method, your price elasticity of demand as the price of pizzas increases from $14 to $16 is " if your income is $20,000 and if your income is $24,000. If the price of a pizza is $10, your income elasticity of demand is as your income increases from $20,000 to $24,000. However, if the price of a pizza is $14, your income elasticity isAttempts 0 0 Keep the Highest 0 / 1 7. Price Elasticity of Demand You are the curator of a museum. It is running short of funds, so you decide to increase revenue. When should you raise the admission price in order to increase revenue? O Only when demand is elastic O Only when demand is inelastic O Always8. Individual and market demand Suppose that Eric and Ginny represent the only two consumers of iced coffee in some hypothetical market. The following table presents their monthly demand schedules for iced coffee: Price Eric's Quantity Demanded Ginny's Quantity Demanded ( Dollars per cup) (Cups) (Cups) 1 8 16 12 OF WU un A W N NA C On the following graph, plot Eric's demand for iced coffee using the green points (triangle symbol). Next, plot Ginny's demand for iced coffee using the purple points (diamond symbol). Finally, plot the market demand for iced coffee using the blue points (circle symbol). Note: Line segments will automatically connect the points. Remember to plot from left to right. Eric's Demand Ginny's Demand O PRICE (Dollars per cup) Market Demand 12 16 20 24 QUANTITY (Cups)9. Movements along versus shifts of demand curves Consider the market demand for beer. Complete the following table by indicating whether an event will cause a movement along the demand curve for beer or a shift of the demand curve for beer, holding all else constant. Event Movement Along Shift An increase in income of consumers O O A change in tastes of consumers that makes them desire more beer O O A decrease in the price of beer O O