Economics 13th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 10

During 2011, drought conditions throughout much of Europe substantially reduced the size of the corn, wheat, and soybean crops, three commodities for which demand is inelastic. Use the price-taker model to determine how the drought affected (a) prices of the three commodities, (b) revenue from the three crops, and (c) the profitability of those farming the three crops.