14. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly

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14. Application: Demand elasticity andagriculture
Consider the market for apples. The following graph shows theweekly demand for apples and the weekly supply of apples. Supposenew farming technology is developed that enables growers to producemore crops with the same resources.
Show the effect this shock has on the market for apples byshifting the demand curve, supply curve, or both.
Note: Select and drag one or both of the curves to the desiredposition. Curves will snap into position, so if you try to move acurve and it snaps back to its original position, just drag it alittle farther.

14 Application Demand Elasticity And Agriculture Consider The Market For Apples The Following Graph Shows The Weekly 1 (15.47 KiB) Viewed 10 times

One of the growers is excited by this advancement because now hecan sell more crops, which he believes will increase revenue inthis market. As an economics student, you can use elasticities todetermine whether this change in price will lead to an increase ordecrease in total revenue in this market.
Using the midpoint method, the price elasticity of demand forapples between the prices of $15 and $9 per bushel is 0.33or 0.67 or 1.33 or 1.5, which means demand iselastic or inelastic or unit elastic betweenthese two points. Therefore, you would tell the grower that hisclaim is correct or incorrect, because totalrevenue will decrease or increase as a resultof the technological advancement.
Confirm your previous conclusion by calculating total revenue inthe apple market before and after the technological advancement.Enter these values in the following table.
Before Technological Advancement
After Technological Advancement
PRICE (Dollars per bushel) 30 24 18 12 00 6 0 0 10 20 30 QUANTITY (Millions of bushels) Demand Supply 40 50 Demand Supply