Suppose That the Inverse Demand Function for Wool Is P

question 90

Essay

Suppose that the inverse demand function for wool is p = A/q for some constant A.Suppose that 1/4 of the world's wool is produced in Australia.
a.If Australian wool production increases by 1% and the rest of the world holds its output constant, what will be the effect on the world price of wool?
b.How does the marginal revenue to Australia from an extra unit of wool relate to the price of wool?

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Definitions:

Till

Unsorted glacial debris deposited directly by melting ice, including a range of sediment sizes from clay to boulders.

Downdropped

Referring to a section of the Earth's crust that has moved downward in relation to adjacent sections, often due to faulting.

Uplifted

Uplifted refers to regions of the Earth's crust that have been raised due to tectonic activities, such as earthquakes or mountain-building processes, altering the landscape and geology.

Glacier

A large, slow-moving mass of ice formed by the compaction and crystallization of snow, found in cold regions and high altitudes.