ASSIGNMENT # 01The 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. One58-gram lemon can provide over 30 milligrams of vitamin C. In Pakistan, vegetable prices showedsharp increase during month of Ramazan. The demand of lemons has been increased in the monthof 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 + 0.40PQd =330 - 0.30PIn the month of Ramadam, the supply cquation of lemons remained as above while the demandequation of lemons became:Qd = 350 - 0.20PRequirement: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)

The market demand function shows the negative relationship between price of the good and its…

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)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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