Final answer:
The elasticity of demand facing a single corn farm can be calculated by dividing the market elasticity of demand by the number of farms. In this case, the elasticity of demand facing a single farm is ε/347,760 = 0.3/347,760.
Step-by-step explanation:
To determine the elasticity of demand facing a single corn farm, we need to understand the concept of elasticity. Elasticity measures the responsiveness of quantity demanded to a change in price. The formula for elasticity is ε = (ΔQ/Q) / (ΔP/P), where ΔQ is the change in quantity demanded, Q is the initial quantity demanded, ΔP is the change in price, and P is the initial price.
In this case, the corn demand elasticity is given as ε = 0.3. This means that a 1% increase in price will result in a 0.3% decrease in quantity demanded. Since we know that the supply elasticity is eη = 0.15, we can assume that supply is relatively inelastic.
Given that the United States has 347,760 corn farms of roughly equal size, the elasticity of demand facing a single farm can be calculated as the elasticity of demand for the entire market divided by the number of farms. Therefore, the elasticity of demand facing a single farm is ε/347,760 = 0.3/347,760.