The demand for corn as an ingredient for an alternative energy source has had a profound effect on its supply as a core food ingredient. So, what has been the effect on the supply of corn and its substitute such as the soybean? The answer can be found by examining the five demand determinants and five supply determinants to see which ones will shift demand and supply. The demand determinants are known as T-I-P-E-N, which stands for Taste of preference, Income, Price of complements and substitutes, Expectation of consumer, and Number of buyers in the market. The supply determinants are known as P-R-E-S-T, which stands for Producers (number of), Resource price, Expectation of business, Subsidies and taxes, and Technology. The farming industry has had to ramp up production of corn to satisfy the demand that was caused by the increase in the number of buyers. More buyers will generate more income, so most likely farmland will be used to produce more corn. The determinants of Number of buyers and Income are responsible for this demand shift. The land available for soybean crops will decrease, resulting in a reduction of supply. This supply shift is the result of Producers (number of).…
References: Columbia Electronic Encyclopedia, 6th Edition, 7/1/2010, p1-1, 1p. Retrieved (2011, January 11), from EBSCOhost database.…
Demand (left) because not as many people are going to want to travel there due to the…
1. Who is likely to be more affected by tax increases on cigarettes: all adults or young adults? Why? Cite elasticity of demand estimates from the article to support you answer.…
A call comes in at three in the morning saying a soldier has been hurt in battle and is facing a life-threatening injury, the timer starts now. With shots being fired at sometimes all hours of the night and this can be a very real event to people facing war, soldier or civilian. Pararescuemen are trained to risk their lives on the battlefield to save others which is such a noble act and they do it every single day. Time is of the essence when trying to save someone from a life-threatening injury occurring on the battlefield.…
Why are the concepts of own and cross-price elasticities of demand essential to competitor identification and market definition? (2 points possible)…
| Increase in supply and demand because manufacturing faster increases supply which decreases price causing an increase in demand.…
1. College logo t-shirts priced at $15 sell at a rate of 25 per week, but when the bookstore marks them down to $10 it finds that it can sell 50 t-shirts per week. What is the price elasticity of demand for the logo t-shirts? Is the demand elastic or inelastic?…
Elasticity of demand is the measurement of change in the price of a product. It measures the percentage change in the quantity demanded caused by a percent price. There are three areas that need to be explored when inquiring about elasticity of demand. First, when the price of merchandise is lowered, how much more merchandise would sell. Second, if you raise the price of the merchandise, how much less merchandise would sell. Third, the merchandise is limited so will people scramble to obtain the merchandise. Elasticity of demand measures the extent of movement along the demand curve.…
6. Explain how a change in each of the determinants of price elasticity would affect the elasticity coefficient.…
An elastic demand is a demand that if the price changes the quantity that is demanded changes quite a bit, and an inelastic demand is no matter the price there will still be a demand for it (Economics, 2017). Generally, an elastic demand is a type of good that is more of a want rather a need, and an inelastic demand would be something that would be along the lines of a necessity. To figure out the elasticity a person would use the equation: (% change in quantity/% change in price). If the elasticity is greater than one or equal to one then it is elastic, and if it is less than one then it is considered inelastic (Economics, 2017). This paper will examine the inelastic demand of gasoline, the elastic demand of clothing, and the purchases that I make in my life that are most elastic and inelastic.…
3. The Olde Yogurt Factory has reduced the price of its popular Mmmm Sundae from $2.25 to $1.75. As a result, the firm’s daily sales of these sundaes have increased from 1,500/day to 1,800/day. Compute the arc price elasticity of demand over this price and consumption quantity range.…
With the growth of red meats as an export, an exponential growth has been seen in the consumption of red meats alone in the United States. In over ten years, the average consumption of red meats and poultry for the average American raised to 222.2 pounds (“US”). This increase led to a large demand that needed to be met. To fill this demand,…
After watching the Section 5.3 Review and Section 6.2 Review videos I have realized that gas price changes are inelastic. Inelastic demand is “when percent change in quantity demanded is less than percent change in price, so price elasticity is less than 1 in absolute value” (Hubbard & O’Brien, 2015b). This means that when a price of a product changes, such as gas, it does not affect the demand of that good or service. I feel that consumers will be responsive to the price change when these fluctuations occur due to changes in supply. Anyone who has driven would understand that whether gas prices are low or high it does not matter how much it costs because we need it, and there are few substitutes available. Yes, we could buy a more fuel-efficient car, move closer to work, take public transportation, or walk, but many people have to drive to continue their daily life activities. Since there are few alternatives and consumers need this, a necessity, consumers will buy it no matter what. This makes gas an inelastic demand. Gas is not elastic because an elastic good or service would be something that we have many substitutes for. For example, if…
“Americans at the beginning of the 21st century are consuming more food and several hundred more calories per person per day than did their counterparts in the late 1950s. Now more than ever, America is a Nation of meat eaters. In 2000, total meat consumption (red meat, poultry, and fish) reached 195 pounds (boneless, trimmed-weight equivalent) per person, 57 pounds above average annual consumption in the 1950s. Each American consumed an average of 7 pounds more red meat than in the 1950s, 46 pounds more poultry, and 4 pounds more fish and shellfish. Rising consumer incomes, especially with the increase in two-income households, and meat prices in the 1990s that were often at 50-year lows, when adjusted for inflation, explain much of the increase in meat consumption. In addition, the meat industry has provided scores of new brand-name, value-added products processed for consumers’ convenience, as well as a host of products for foodservice operators’. (United States Department of Agriculture [USDA], 2002, pp. 3).…