g An increase in the interest rate: has no effect on investment. may be caused by a drop in investment demand. increases planned investment because people who make money from interest have more money to invest. reduces planned investment because the interest rate is the cost of borrowing to finance investment projects.

One of the growers is excited by this advancement because now he can sell more crops, which he believes will increase revenue in this market. as an economics student, you can use elasticities to determine whether this change in price will lead to an increase or decrease in total revenue in this market. using the midpoint method, the price elasticity of demand for soybeans between the prices of $5 and $4 per bushel is , which means demand is between these two points. therefore, you would tell the grower that his claim is because total revenue will as a result of the technological advancement.