The Case: Lemon is a popular fruit, which is used to add flavor to food. Lemons give flavor to baked goods, marinades, sauces, salad dressings, desserts, and drinks. It is also a good source of vitamin C. One S8-gram lemon can provide over 30 milligrams of vitamin C. In Pakistan, vegetable prices showed sharp increase during month of Ramazan. The demand of lemons has been increased in the month of Ramadan, which was responsible for the increase in price of lemons. Suppose the initial demand and supply equations of lemons are given as follows: Qs = 260 + 0.40P Qd =330 - 0.30P In the month of Ramadan, the supply cquation of lemons remained as above while the demand equation of lemons became: Qd =350 - 0.20P Requirement: a) Find the market clearing level of quantity and price of lemons before demand change. b) Find the market clearing level of quantity and price of lemons after demand change. e) Find out the price elasticity of demand of lemons at initial equilibrium price and quantity. Marks: (3+3+4)
The Case: Lemon is a popular fruit, which is used to add flavor to food. Lemons give flavor to baked goods, marinades, sauces, salad dressings, desserts, and drinks. It is also a good source of vitamin C. One S8-gram lemon can provide over 30 milligrams of vitamin C. In Pakistan, vegetable prices showed sharp increase during month of Ramazan. The demand of lemons has been increased in the month of Ramadan, which was responsible for the increase in price of lemons. Suppose the initial demand and supply equations of lemons are given as follows: Qs = 260 + 0.40P Qd =330 - 0.30P In the month of Ramadan, the supply cquation of lemons remained as above while the demand equation of lemons became: Qd =350 - 0.20P Requirement: a) Find the market clearing level of quantity and price of lemons before demand change. b) Find the market clearing level of quantity and price of lemons after demand change. e) Find out the price elasticity of demand of lemons at initial equilibrium price and quantity. Marks: (3+3+4)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![ASSIGNMENT # 01
The Case:
Lemon is a popular fruit, which is used to add flavor to food. Lemons give flavor to baked goods,
marinades, sauces, salad dressings, desserts, and drinks. It is also a good source of vitamin C. One
58-gram lemon can provide over 30 milligrams of vitamin C. In Pakistan, vegetable prices showed
sharp increase during month of Ramazan. The demand of lemons has been increased in the month
of Ramadan, which was responsible for the increase in price of lemons.
Suppose the initial demand and supply cquations of lemons are given as follows:
Qs = 260 + 0.40P
Qd =330 - 0.30P
In the month of Ramadam, the supply cquation of lemons remained as above while the demand
equation of lemons became:
Qd = 350 - 0.20P
Requirement:
a) Find the market clearing level of quantity and price of lemons before demand change.
b) Find the market clearing level of quantity and price of lemons after demand change.
c) Find out the price elasticity of demand of lemons at initial equilibrium price and quantity.
Marks: (3+3+4)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd6afb2aa-b07a-458a-b33e-44f201edb5e3%2F7a7a1e68-c16d-4c60-b7ef-498714ad1895%2Fjuishzd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ASSIGNMENT # 01
The Case:
Lemon is a popular fruit, which is used to add flavor to food. Lemons give flavor to baked goods,
marinades, sauces, salad dressings, desserts, and drinks. It is also a good source of vitamin C. One
58-gram lemon can provide over 30 milligrams of vitamin C. In Pakistan, vegetable prices showed
sharp increase during month of Ramazan. The demand of lemons has been increased in the month
of Ramadan, which was responsible for the increase in price of lemons.
Suppose the initial demand and supply cquations of lemons are given as follows:
Qs = 260 + 0.40P
Qd =330 - 0.30P
In the month of Ramadam, the supply cquation of lemons remained as above while the demand
equation of lemons became:
Qd = 350 - 0.20P
Requirement:
a) Find the market clearing level of quantity and price of lemons before demand change.
b) Find the market clearing level of quantity and price of lemons after demand change.
c) Find out the price elasticity of demand of lemons at initial equilibrium price and quantity.
Marks: (3+3+4)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education