Sponsored Links


Results 1 to 2 of 2

Thread: ECO401 Economics Assignment No.1 Solution Spring Semester 2013

  1. #1
    Administrator Vuhelper's Avatar
    Join Date
    Apr 2011
    Posts
    9,578

    18 ECO401 Economics Assignment No.1 Solution Spring Semester 2013

    Sponsored Links1



    ECO401 Economics Assignment No.1 Solution Spring Semester 2013

    The case:
    The local sports goods manufacturing industry is one of the major source of foreign
    exchange earnings of Pakistan. At present, there are more than 2000 units, mostly on
    small scale in operation, with an installed capacity of Rs.20 billion per annum. The units
    are operating on single-shift basis. Sports goods worth US$261.148 million were
    exported in the year 2012. The industry enjoys a low markup rate of about 7% on loans
    and has an easy access to the European and US markets. Let the demand and supply
    functions of sports goods industry of Pakistan are:
    Qd = 17000 –6P
    Qs = 900 + 8P
    However, due to increased competition by countries such as China, India and South
    Korea the industry can no longer enjoy the profit; it did in the region earlier. These
    countries might not have the seasoned labor of Sialkot but they can compete Pakistan
    and meet any supply order on the basis of their research and development resources
    and uninterrupted power supplies. But in Pakistan due to shortage of electricity, research
    and development price of sports goods remained at very high level.
    a. Find the equilibrium price and equilibrium quantity for the sports goods industry in
    Pakistan. Also show the equilibrium condition graphically.
    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.
    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 electricity.
    Illustrate graphically.
    d. Suppose the Government takes initiatives to improve technology and provide
    better infrastructure, what will be the impact of these initiatives on equilibrium
    situation? Illustrate graphically.
    (Marks: a: 2+2+3, b: 4+4, c: 2.5, d: 2.5)


    Sponsored Links

  2. #2
    Administrator Vuhelper's Avatar
    Join Date
    Apr 2011
    Posts
    9,578
    Idea Solution:

    1).

    Qd = Qs

    17000 - 6P = 900+8P

    8 P + 6 P = 17000 - 900

    14 P = 16,100

    P = 16,100/14 = 1150

    Put Price into any 1 equation then we get quantity:

    Qd = 17,000 - 6 P

    = 17, 000 - 6 (1150)

    = 17,000 - 6900

    = 10, 100

    Qs = 900 + 8 P

    = 900 + 8 (1150)

    = 900 + 9200

    = 10 , 100

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. ECO401 - Economics 2nd GDB Solution Semester 2014
    By Vuhelper in forum GDB Discussion
    Replies: 3
    Last Post: 01-31-2014, 12:07 AM
  2. ECO401 Economics GDB Solution Spring Semester June 2013
    By Vuhelper in forum GDB Discussion
    Replies: 0
    Last Post: 06-20-2013, 05:03 PM
  3. Replies: 2
    Last Post: 01-18-2013, 04:12 PM
  4. Replies: 0
    Last Post: 06-07-2012, 09:48 PM
  5. Replies: 13
    Last Post: 04-14-2012, 05:29 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
-: Vuhelp Disclaimer :-
None of the files shown here are hosted or transmitted by this server. The links are provided solely by this site's users. The administrator's or staff of Vuhelp.net cannot be held responsible for what its users post, or any other actions of its users. You may not use this site to distribute or download any material when you do not have the legal rights to do so. It is your own responsibility to adhere to these terms. If you have any doubts about legality of content or you have any suspicions, feel free to contact us.
Online Education | JhelumSoft