Based on Roberts and Schlenker (forthcoming), the corn demand elasticity is ε =0.3, and the supply elasticity is eη= 0.15. According to the 2007 Census of Agriculture, the United States has 347,760 corn farms. Assuming that the farms are of roughly equal size, what is the elasticity of demand facing a single farm?

52,164.15

Explanation:

The price Elasticity of demand for corn refers to how much the quantity demanded of corn changes as a result of a change in price.

When given the elasticity for a group and need to calculate for a single unit, use the formula;

εi = nε - (n -1)eη

Demand elasticity for single unit = (Number of units * entire demand elasticity) - ( number of units - 1) * supply elasticity of each firm

= (347,760 * 0.3) - (347,760 - 1) * 0.15

= 104,328 - 52,163.85

= 52,164.15

Note: Do confirm that the figures you provided are the correct ones. If yes then no problems.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; comparing the additional benefits and costs;