Based on Roberts and Schlenker (forthcoming), the corn demand elasticity is ε =0.3, and the supply elasticity is eη= 0.15. Acc

Question

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Based on Roberts and Schlenker (forthcoming), the corn demand elasticity is ε =0.3, and the supply elasticity is eη= 0.15. Acc

ording to the 2007 Census of Agriculture, the United States has 347,760 corn farms. Assuming that the farms are of roughly equal size, what is the elasticity of demand facing a single farm?

Business

1 answer:

matrenka [14] · Answer 1 · 2022-05-04T22:05:55+03:00

Answer: 52,164.15

Explanation:

The price Elasticity of demand for corn refers to how much the quantity demanded of corn changes as a result of a change in price.

When given the elasticity for a group and need to calculate for a single unit, use the formula;

εi = nε - (n -1)eη

Demand elasticity for single unit = (Number of units * entire demand elasticity) - ( number of units - 1) * supply elasticity of each firm

= (347,760 * 0.3) - (347,760 - 1) * 0.15

= 104,328 - 52,163.85

= 52,164.15

<em>Note: Do confirm that the figures you provided are the correct ones. If yes then no problems. </em>

Based on Roberts and Schlenker​ (forthcoming), the corn demand elasticity is ε =0.3​, and the supply elasticity is eη= 0.15. Acc

Based on Roberts and Schlenker (forthcoming), the corn demand elasticity is ε =0.3, and the supply elasticity is eη= 0.15. Acc