(Solved): 14. Application: Demand elasticity and agriculture Consider the market for apples. The following g ...

14. Application: Demand elasticity and agriculture Consider the market for apples. The following graph shows the weekly demand for apples and the weekly supply of apples. Suppose new farming technology is developed that enables growers to produce more crops with the same resources. Show the effect this shock has on the market for apples by shifting the demand curve, supply curve, or both. 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. Demand Supply Supply 0 20 50 QUANTITY (Millions of bushels) One of the growers is excited by this advancement because now she can sell more crops, which she believes will increase revenue in this market. As an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for apples between the prices of $10 and $6 per bushel is demand is between these two points. Therefore, you would tell the grower that her claim is as a result of the technological advancement. , which means because total revenue Confirm your previous conclusion by calculating total revenue in the apple market before and after the technological advancement. Enter these values in the following table. Before Technological Advancement After Technological Advancement Total Revenue (Millions of Dollars) B 16 PRICE (Dollars per bushel) 10 0 10 Demand 40