Knight Company reports the following costs and expenses in May. Factory utilities $15,900 Direct labor $74,100 Depreciation on factory equipment 13,950 Sales salaries 47,000 Depreciation on delivery trucks 3,900 Property taxes on factory building 3,000 Indirect factory labor 49,000 Repairs to office equipment 1,600 Indirect materials 81,300 Factory repairs 2,750 Direct materials used 138,700 Advertising 16,200 Factory manager’s salary 8,500 Office supplies used 2,930

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.