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Teacher professional development and classroom resources across the curriculum
To illustrate the concepts of perfect competition and the elasticity of supply and demand.
If the market demand curve for a given commodity—say beef—shifts upward and to the right, this is an indication that...
consumers want more of the commodity at the current price.NEXT QUESTION
The price elasticity of demand is essentially a measure of how...
sensitive market demand is to changes in price.NEXT QUESTION
Checking figures provided by the U.S. Department of Agriculture, we find that the estimated price elasticity of demand for canned tomatoes is 2.5, while the estimated price elasticity of demand for corn is .5. These figures suggest that...
market demand for corn is not very much affected by price.NEXT QUESTION
Which of the following factors is probably MOST important in determining whether the price elasticity of a given product is high or low?
Other factors could be pertinent to some extent, though the first factor is the most significant. Length of time on the market is probably not directly related except to the extent that it allows consumers to become better acquainted with the product. Similarly, money spent on advertising provides only a general clue since we don’t know how consumers know that the product is high quality — or whether that is a factor influencing sales. They may claim to care about quality, but actually use some other criterion in selecting an item for purchase; for instance, designer jeans may outsell other jeans that are more durable but less stylish.NEXT QUESTION
Which of the following statements regarding the demand and supply curves for farm products is MOST accurate?
The demand curve has tended to shift very slowly to the right, and the supply curve very rapidly to the right.NEXT QUESTION
The expression “the farmer is a price taker not a price maker” refers to the fact that...
in perfect competition, no one producer can control prices.RESTART QUIZ