The diagram below illustrates the demand for and supply of maize. Use the information in...

Explanation

(a) (i) Total revenue is

Price x Quantity = 100 Dollars x 30 tonnes

Total revenue is = 3000 Dollars

Total revenue = P x Q = 40 Dollars x 40 tonnes

Total revenue is = 1 ,600 Dollars

(b) 3000 Dollars - 1600 Dollars = 1400 Dollars

There is a Fall in TR

(c)(i) \(\frac{Percentage change in Quantity demanded}{Percentage change in Price}\)

\(\frac{10}{30}\) x \(\frac{100}{1}\) = \(\frac{60}{100}\) x \(\frac{33.33}{60}\) = 0.55

OR \(\frac{\Delta Q}{\Delta P}\) x \(\frac{P}{Q}\) ; \(\frac{\10}{\60}\) x \(\frac{100}{30}\) = 0.55

(ii) Ed is less than 1 therefore the demand for maize is inelastic

(d) (i) A fall in the price of other related goods will lead to increase in production.

(ii) Improvement in technology will lead to increase in production.

(iii) Fall in input prices or fall in cost of production.

(iv) Favorable climate

(v) Increase in the number of producers.