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Case Study: Total Agricultural Revenue In Tulare County

524 Words3 Pages

1. Total agricultural revenue in Tulare County (just south of Fresno) set a record high in 2014, yet the drought in California has reduced the quantity harvested of many food crops.* Use the principles of demand elasticity described in this case to explain the recent record revenues.

In 2014 total agricultural revenue in Tulare County set a record high of eight billions dollars. During this time California was going through a drought that reduced the quantity harvested of many crops that include cotton, wheat and alfalfa. Demand elasticity is how demand changes as other factors change. Demand elasticity helped Tulare County position as the nation’s number one agricultural county because of price, market entry of competitive goods, and other factors. By farmers knowing the demand elasticity, it allowed them to make better revenue projections and create more accurate budgets. The result of this made farmers operate …show more content…

It does not help farmers sell more when consumers incomes go up since the supply and demand for food are unaffected when the price of food changes. When price goes up, consumers’ buying food stay about the same, and when the price goes down, consumers’ buying food also remain unchanged.

3. Give 3 different causes of productivity enhancements that have led to increasing supply of agricultural products.

One of causes of productivity enhancements that have led to increasing supply of agricultural growth driven by its massive dairy and citrus industries. Secondly, many farmers switched to pumping ground water to keep their crops alive. Farmers were able to grow more products with fewer resources. Lastly, crops like nuts and citrus grew by 22,680 acres in 2014.

4. Describe two negative effects to the agricultural industry caused by better farming productivity and the corresponding increased

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