The following graph illustrates the market for walnuts. It plots the monthly supply of walnuts and the monthly demand for walnuts. Suppose new gathering technology is invented, allowing growers to produce more crops using the same amount of resources.
Show the effect this shock has on the market for walnuts by shifting the demand curve, supply curve, or both.
"Several growers areSeveral growers are happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in 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 walnuts between the price levels of $10 and $8 per ton is_____ , (0.41, 0.82, 1.22, or 1.64) meaning that between these two points, demand is______ (elastic, inelastic, or unit elastic) Thus, you can conclude that the grower’s claim is_______ (correct or incorrect), because total revenue will________ (decrease or increase) due to the technological improvement. Confirm your previous conclusion by calculating total revenue in the walnut market before and after the technological improvement. Enter these values in the following table. Total Revenue (Thousands of Dollars): Before Technological Improvement_______. After Technological Improvement) happy with this advancement in technology because now they can sell more crops, which they believe will lead to increases in 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 walnuts between the price levels of $10 and $8 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 technological improvement. Confirm your previous conclusion by calculating total revenue in the walnut
