Explain the impact of the bushfires

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Question 1? The 2019/20 Australia Bushfires affected food production nearly in New South Wales, Queensland and Victoria that are regarded as the food basket for Australia. Assume that before, the bushfire, in 2017/18 Australia produced 80,000 metric tons. Also, assuime that after the bushfire devastation in 2019/20 Australia produced 50,000 metric tons of rice. Finally, assume that during the same period 2017/18 and 2019/20 the price rice in Australia rose from AUD 1.75 per kg to AUD 3.00 per kg respectively. Use the Demand and Supply Model below to answer the questions that follow.?

i. Use the Demand and Supply Model above to explain the impact of the bushfires on the rice market in New South Wales.

ii. Use the mid-point approach to calculate the price elasticity of demand for rice in Australia.

iii. What is the price elasticity of demand for rice? Based on your answer, is rice a necessity commodity? Explain your answer.

Reference no: EM133078978

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