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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />n^~~?s <br />.~~.~~~. <br /> <br />re a given percentage change in price causes a correspondingly greater per- <br />centage change in the quantity produced (consumed). In an inelastic sched- <br />ule, a change in price causes a smaller change in quantity. Agricultural <br />commodities generally have inelastic supply and demand schedules. <br /> <br />The above definition is for own elasticity - how the price and quanti- <br />ty of a given commodity are responsive to each other. Cross elasticity is <br />a measure of the response in one commodity to a change in another <br />commodity. For example, if the price of wheat rises and all other factors <br />are held constant, then the amount of feed grains produced would decline. <br />This would occur because some producers would plant more acres of wheat and <br />less of feed grains. The measurement of this impact is the cross elastici- <br />ty of feed grains to the price of wheat. <br /> <br />The model structure of the CommOdity Production and Utilization com- <br />ponent provides the opportunity to include own and cross price elasticities <br />for the most important 20 agricultural commodities for each supply and <br />demand category although not all possible elasticities are estimated. Sup- <br />ply categories included in the model are U.S. production and import sup- <br />plies. Demand categories are domestic food, domestic feed, and export <br />demands. These elasticity coefficients were developed by Gerald Plato of <br />the USDA in 1975-76. The actual coefficients are shown in Tables 11-5 <br />through II~9. Using Table 11-5, Production Supply Elasticities, as an <br />example, reading down the second column indicates that a 1 percent increase <br /> <br />11-40 <br />