homework, Microeconomics

Assignment Help:
Do not submit more than 1 file in the Canvas submission link.
A few years ago peanut farmers in India experienced a super-bumper crop due
to favorable weather conditions. Initially, the equilibrium price was $3 and the
equilibrium quantity was 500 tons. After the favorable weather conditions the
price of peanuts fell and the quantity increased. The new equilibrium price fell to
$1 and the new equilibrium quantity increased to 700 tons.
i. Draw a relatively inelastic demand curve and a relatively elastic supply curve for
peanuts.
ii. Label the original equilibrium price and equilibrium quantity on your graph.
iii. Label the demand curve, supply curve, the vertical axis, and the horizontal axis.
iv. On your graph show the impact of favorable weather conditions. Use arrows and
label the new curve(s) wherever appropriate.
v. Label the new equilibrium price and equilibrium quantity on your graph.
vi. What is the formula for calculating total revenue? Calculate the total revenue at
the old equilibrium. Now calculate the total revenue at the new equilibrium.
vii. Is the total revenue under the new equilibrium larger or smaller than under the
old equilibrium? Using the concept of price elasticity of demand, explain the
reason for the change in total revenue.

Related Discussions:- homework

Individual demand curve - effect of price change, Individual Demand * T...

Individual Demand * The Individual Demand Curve  - Two significant Properties of Demand Curves - 1) The level of utility which can be attained changes while moving along

Entrepreneur, Entrepreneur: The entrepreneur or enterprise is a specia...

Entrepreneur: The entrepreneur or enterprise is a special factor of production that is in charge of the organization of the other three factors of production (land, labour and

Macroeconomics, 8,000,000 people in the population who are 16 yrs of age an...

8,000,000 people in the population who are 16 yrs of age and older. 80% are willing to work. Currently 10% unemployment rate. a. how many people in labor force? b. How many are un

Expenditure trends and pattern, Expenditure Trends and Pattern: Total ...

Expenditure Trends and Pattern: Total expenditure of the Centre has risen twice as fast as total revenue, although much of this reflects rising interest payments. Revenue expe

Monopoly, causes for emergency of monopoly

causes for emergency of monopoly

Assignment, If the Bank of England wanted to discourage investment spending...

If the Bank of England wanted to discourage investment spending and reduce aggregate demand, it could?

Economics Concepts, Suppose taht two people, Michell andJames each live alo...

Suppose taht two people, Michell andJames each live alone in an isolated region. They each have the same resources available, and they grow potatoes and raise chickens. If Michelle

Price mechanism, discuss how the price mechanism allocate resources in a fr...

discuss how the price mechanism allocate resources in a free market system

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd