Suppose the price elasticity of demand for wheat is 1

Subject:EconomicsPrice:2.88 Bought3

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Suppose the price elasticity of demand for wheat is 1.80 in the long run and 0.40 in the short run.

A. If the price of wheat rises from $5.85 per bushel to $6.15 per bushel, what is the percentage change (using the midpoint method) in quantity-demanded in the

i. long run?

ii. short run?

B. Explain why the change in quantity-demanded would be greater in the long run than in the short run.