Question 1:

The lockdown around the world has caused the rapid growth in the electronic market as people have shifted from conventional methods to the new methods for imparting knowledge and staying connected. If demand and supply function are given as:

Qd= 65 - 10PQs= -35 + 15P

a.Find the equilibrium price and quantity and show it on labeled D/S diagram.

b.How do you interpret market equilibrium:(i) if P= Rs.6?(ii) if P=2?

c.Show on the Demand-Supply diagram in (a), the graphical interpretation of your answer of (b).

Question 2:

Demand for Orange Juice is given as

Qd = 5000 - 2500 P + 1200 I + 650 E - 255 Ps

Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.

a.Find the Demand Equation.

b.Using the demand function from part a.,

Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.

c.What will be the 'Price Elasticity of Demand' at P = Rs.125?

d.Interpret the Elasticity of Demand calculated in (C) above.