Sugar price reaches 28-year high, published on August 10th, 2009The price of raw sugar recently reached its highest level since 1981 due to problems withsupply. Historically, raw sugar has traded at between 10 and 12 US cents per pound at the NewYork Board of Trade. But the price increased to over 18 cents last month. Growing demand inBrazil for sugar to be turned into ethanol for fuel, coupled with a sharp fall in Indian productionhave both been factors in the price increase. Sugar production in India for 2008-09 fell 45%year-on-year due to less rain in the monsoon season damaging a number of agricultural crops.The London-based International Sugar Qrganization predicts that global consumption ofis likely to outstrip production by 9 million tones next year, forcing food companies andgovernments to dig into stockpiles. In the US, snack producers including Mars, Nestlé andKrispy Kreme Doughnuts put pressure on the US government to relax import controls, warningthat otherwise they might run out of sugar. Commentators predict that most shoppers will beunaffected because sugar is such a small part of a consumer's typical spending in a week thatno one will notice an increase in price.sugarа.List three factors that will shift the demand curve for sugar and three factors that willshift the supply curve forsugar.b.Do you think the demand for sugar is price elastic or inelastic? Justify your choice.If the price of sugar increases and the total revenue received by the sellers' decline, isthe demand for this good over this segment of the demand curve elastic or inelastic? Explain.с.d.Supposed a sugar producer raises its price of one pound (k) of sugar from $8.00 to$10.00. As a result, demand falls from 20 units to 18 units demanded. Calculate the priceelasticity of demand and state if demand is elastic, unit elastic or inelastic?

Three factors that can shift the demand curve of the sugar are: 1. Price of the related goods -…

a. List three factors that will shift the demand curve for sugar and three factors that will shift the supply curve for sugar. b. Do you think the demand for sugar is price elastic or inelastic? Justify your choice. If the price of sugar increases and the total revenue received by the sellers' decline, is the demand for this good over this segment of the demand curve elastic or inelastic? Explain. с. d. Supposed a sugar producer raises its price of one pound (k) of sugar from $8.00 to $10.00. As a result, demand falls from 20 units to 18 units demanded. Calculate the price elasticity of demand and state if demand is elastic, unit elastic or inelastic?

a. List three factors that will shift the demand curve for sugar and three factors that will shift the supply curve for sugar. b. Do you think the demand for sugar is price elastic or inelastic? Justify your choice. If the price of sugar increases and the total revenue received by the sellers' decline, is the demand for this good over this segment of the demand curve elastic or inelastic? Explain. с. d. Supposed a sugar producer raises its price of one pound (k) of sugar from $8.00 to $10.00. As a result, demand falls from 20 units to 18 units demanded. Calculate the price elasticity of demand and state if demand is elastic, unit elastic or inelastic?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.13P

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