Calculate the price elasticity of demand at that point

Question

Problem

Suppose that the demand for wheat (measured in bushels) is given by:

Q_w = 90 - 8P_w

where Q_w is the number of bushels demanded in millions and P_w is the price per bushel.

A. This year's harvest is 8 million bushels. Calculate the equilibrium quantity. This question requires you to show your work and produce a mathematical answer.

B. This year's harvest is 8 million bushels. Calculate the price elasticity of demand at that point. This question requires you to show your work and produce a mathematical answer.

C. Draw the demand curve and identify the equilibrium price and quantity (note that the quantity is 8 million bushels.

D. Draw the Total Revenue Curve and identify the TR and Q on that drawing.

E. If next year's harvest were to fall below 8 million bushels, would the revenues received by wheat farmers increase or decrease? This question can be answered in a short sentence.