From Table 4-1 in the text, determine by how much the demand for Florida Indian River oranges would change as a result of a 10 percent increase in the price of Florida interior oranges, and vice versa.
Table 4-1:
Type of Orange Florida Indian River Florida Interior
Florida Indian River -3.07 +0.01
Florida Interior +1.16 -3.01
I'm having mucho trouble here. I need to see the table to see what is going on.
Table 4-1:
Type of Orange: Florida Indian River Florida Interior
Florida Indian River -3.07 +0.01
Florida Interior +1.16 -3.01
So, I take it, this is a two-by-two table. The rows are Indian River and Interior. The columns are also Indian River and Interior. What are the values in the tables? That is, what do they measure or represent??
To determine how the demand for Florida Indian River oranges would change as a result of a 10 percent increase in the price of Florida interior oranges, you need to refer to the values in Table 4-1.
In the table, the value -3.07 represents the change in demand for Florida Indian River oranges when the price of Florida Indian River oranges changes by 1%. Similarly, the value +1.16 represents the change in demand for Florida Indian River oranges when the price of Florida Interior oranges changes by 1%.
To calculate the change in demand for Florida Indian River oranges when the price of Florida Interior oranges increases by 10%, you can multiply the value +1.16 by 10. Therefore, the demand for Florida Indian River oranges would increase by +11.6 (1.16 multiplied by 10). This means that a 10% increase in the price of Florida Interior oranges would lead to an 11.6% increase in the demand for Florida Indian River oranges.
Now, to determine how the demand for Florida Interior oranges would change as a result of a 10 percent increase in the price of Florida Indian River oranges, you can use the value -3.07. Multiply -3.07 by 10 to calculate the change in demand for Florida Interior oranges. This gives you a value of -30.7 (-3.07 multiplied by 10). Therefore, a 10% increase in the price of Florida Indian River oranges would lead to a 30.7% decrease in the demand for Florida Interior oranges.