Question 1 Suppose Ms. Zeenia demands 150 units of ice cream at price 50, if the price tends to increase to 60 she reduced her demand by 30 units while a further increase in the price by 10 rupees led to the reduction in the quantity demanded to 90 units ceteris paribus. Given the information above drive the demand function. Now suppose the price of milk has increased, illustrates graphically if there would be any change in the demand function elucidated in part a. Also, explain why or why not? Question 2 Keeping the present rate of inflation (increase in the general price level) in mind, consumers living in Karachi are anticipating that the price of tomatoes will go up just like it did last year in November. In your opinion explain if there would be any impact on the current demand for tomatoes or not. Also, if there would be any change elucidate the movement or shift in the demand curve graphically. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules: Price (Per Bottle of Perfume)Zimal’s Quantity DemandedZawaiyar’s Quantity DemandedMarket Demand100600650 200500550 300400450 400300350 500200250 600100150 Given the following information construct market demand curve.

The table is calculated as follows:

Answered: Ms. Zeenia demands 150 units of ice…

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...

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Question 1

Suppose Ms. Zeenia demands 150 units of ice cream at price 50, if the price tends to increase to 60 she reduced her demand by 30 units while a further increase in the price by 10 rupees led to the reduction in the quantity demanded to 90 units ceteris paribus. Given the information above drive the demand function.

Now suppose the price of milk has increased, illustrates graphically if there would be any change in the demand function elucidated in part a. Also, explain why or why not?

Question 2

Keeping the present rate of inflation (increase in the general price level) in mind, consumers living in Karachi are anticipating that the price of tomatoes will go up just like it did last year in November. In your opinion explain if there would be any impact on the current demand for tomatoes or not. Also, if there would be any change elucidate the movement or shift in the demand curve graphically.

Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:

Price (Per Bottle of Perfume)	Zimal’s Quantity Demanded	Zawaiyar’s Quantity Demanded	Market Demand
100	600	650
200	500	550
300	400	450
400	300	350
500	200	250
600	100	150

Given the following information construct market demand curve.

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