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a. Find the equilibrium price and equil… Show more Economi

Paper help Economics a. Find the equilibrium price and equil… Show more Economi

Economics

a. Find the equilibrium price and equil… Show more Economi

a. Find the equilibrium price and equil… Show more Economics (ECO401) Assignment No. 01 Qd=17000-6P Qs=900+8P a. Find the equilibrium price and equilibrium quantity for the sports goods industry in Pakistan. Also show the equilibrium condition graphically. In equilibrium, Qd=Qs Therefore, 17000-6P=900+8P 17000-900=8P+6P 16100=14P 14P=16100 P=1150 Equilibrium price putting the value of price in any demand and supply equation Qd=17000-6P Qd=17000-6(1150) Qd=17000-6900 Qd=10100 Equilibrium demand b. Find out the price elasticity of demand and price elasticity of supply of Sports goods when the industry is in equilibrium and interpret the results. Solution: price elasticity of demand=dQ/dPxP/Q Q=17000-6P dQ/dP=-6 dQ/dPxP/Q=-6×1150/10100 =-6900/10100 =0.6831 Ans. price elasticity of supply=dQ/dPxP/Q Qs=900+8P dQ/dP=8 dQ/dPxP/Q=8×1150/10100 =9200/10100 =0.9108 Ans. c. What will be the effect on the equilibrium situation of sports goods industry if cost of production of sports goods increases due to high per unit cost of elasticity. Illustrate graphically. d. Suppose the Government takes initiatives to improve technology and provide better infrastructure what will be the imopact of these initiatives on equilibrium situation? Illustrate graphically. plz give ma complete answer plz • Show less

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