2. a. The market for bananas is in equilibrium. Use diagrams to show the effects of...
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2. a. The market for bananas is in equilibrium. Use diagrams to show the effects of the following changes on the equilibrium price and quantity: i. A cyclone destroys 70% of the banana crop ii. A health report shows that a banana a day increases life expectancy. iii. A new harvesting method increases the productivity of banana trees. ii. The government introduces an output tax on bananas. v. The population increases. b. Following a cyclone the price of bananas rises from $3 per kilo to $5 per kilo. The quantity sold declines from 800 tonnes per day to 400 tonnes per day. Calculate the price elasticity of demand for bananas using the mid-point method. Is the demand for bananas elastic or inelastic? Explain your answer. 2. a. The market for bananas is in equilibrium. Use diagrams to show the effects of the following changes on the equilibrium price and quantity: i. A cyclone destroys 70% of the banana crop ii. A health report shows that a banana a day increases life expectancy. iii. A new harvesting method increases the productivity of banana trees. ii. The government introduces an output tax on bananas. v. The population increases. b. Following a cyclone the price of bananas rises from $3 per kilo to $5 per kilo. The quantity sold declines from 800 tonnes per day to 400 tonnes per day. Calculate the price elasticity of demand for bananas using the mid-point method. Is the demand for bananas elastic or inelastic? Explain your answer.
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Market for bananas is in equillibrium i A cyclone destroys 70 of the banana cropSo there would be sh... View the full answer
Related Book For
Managerial Economics and Strategy
ISBN: 978-0321566447
1st edition
Authors: Jeffrey M. Perloff, James A. Brander
Posted Date:
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