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# ECO401 Assignment no#1 Spring 2016

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Our main purpose here discussion not just Solution

We are here with you hands in hands to facilitate your learning and do not appreciate the idea of copying or replicating solutions.

The Case: Pakistan motorcycle industry is growing rapidly and it is not only meeting the local demand but also in the position to export other countries and contribute in foreign trade as well. The industry is using both local and imported auto-parts for the production of motorcycles. Pakistan Auto Manufacturers Association (PAMA) is also playing vital role in promotion of motorcycle industry. To promote domestic industry, PAMA has suggested government to reduce tax on local auto-parts used for manufacturing motorcycles. There are many motorcycle manufactures in Pakistan like Atlas Honda, Suzuki Pakistan Motorcycles, Dawood Yamaha Group, Sohrab Motorcycles and United auto industries (PVT) Ltd. Among these manufacturers “United auto industries (PVT) Ltd.” is new but growing manufacturer. This company was established in 1999 and its production plant is situated in Lahore. It has launched Rickshaws and 4-stock motorcycles which are durable and very economical. This company is producing 200,000 units annually. This company is progressing very well in Pakistan and attaining valuable share in the market. This motorcycle company has to face competition from other motorcycles producers as well. Suppose the demand and supply function of this company is given as follows: Qd=650000-11P Qs=700+5P Requirement: (a) Find the equilibrium price and equilibrium quantity for “United auto industries (PVT) Ltd.” Also show the equilibrium condition graphically. (b) Find out the price elasticity of demand and price elasticity of supply of this company when it is in equilibrium and interpret the results. (c) What will be the effect on the equilibrium situation of the company if taxes on local auto parts are reduced? Illustrate graphically. (Marks: a: 2+2+3, b: 4+4, c: 5)

Please koi idea do ke kese krna ha

yar koi solution he bta da

please koye solution he bta do oplz

plz can any body help me to solve out part b.....plzzzzzzzzzzzzzzzzzzzzz

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IDEA SOLUTION Attached with graph

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thanks but solution wrong ha

find the solution and enjoy

Answer 1=solve 700+5P = 650000_11p and your answer will be P=40581 and Qd = 203606 and qs = 203606

Yes!! Thats right. Part (a)

full update solution

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