The following table gives data on the price of rye and the number of bushels of
ID: 1103302 • Letter: T
Question
The following table gives data on the price of rye and the number of bushels of rye sold in 2015 and 2016.
Year
Price
(Dollars per bushel)
Quantity
(Bushels)
2015
$3.00
66,000,000
2016
$2.00
1010,000,000
a. Calculate the change in the quantity of rye demanded divided by the change in the price of rye. Measure the quantity of rye demanded in bushels. The change in the quantity of rye demanded divided by the change in the price of rye in bushels is___
(Enter your response as an integer. Include a minus sign if necessary.)
b. Calculate the change in the quantity of rye demanded divided by the change in the price of rye, but this time measure the quantity of rye demanded in millions of bushels. The change in the quantity of rye demanded divided by the change in the price of rye in millions of bushels is__
(Enter your response as an integer. Include a minus sign if necessary.)
Compared to part a, the answer to part b is larger / smaller in absolute terms (i.e., ignore the sign of these values).
c. Finally, assuming that the demand curve for rye did not shift between 2015 and 2016, use the information in the table to calculate the price elasticity of demand for rye. Using the midpoint formula, the price elasticity of demand for rye is__(Enter your response rounded to two decimal placeslong dash—do not forget to include the minus sign.)
Year
Price
(Dollars per bushel)
Quantity
(Bushels)
2015
$3.00
66,000,000
2016
$2.00
1010,000,000
Explanation / Answer
a) change in quantity demanded = 1010,000,000 - 66,000,000 = 944000000
chnage in price = 2-3 = -1
so the answer is = - 944000000
b) change in quantity demanded - 1010 million - 66 million = 944 million.
therefore,
the answer is = -944 millions.
C ) the price elasticity of demand = (101000000066000000)÷(1010000000+66000000) / (23)÷(2+3)
= - 4.387
so, the price elasticity of demand for rye is -4.39 .
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