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ECO401 Assignment No 1, Fall 2014,Solutions and Discussions Due Date: Nov-27, 2014

ECO401 Assignment No 1, Fall 2014,Solutions and Discussions Due Date: Nov-27, 2014

Important announcement,  Assignment # 01  ECONOMICS (ECO401)

 Dear Students!

This is to inform that Assignment No. 1 will be opened on November 20, 2014 and due date of assignment submission will be November 27, 2014.

A 24 hours extra/grace period after the due date is usually available to overcome uploading difficulties which may be faced by the students on last date.  This extra time should only be used to meet the emergencies; and above mentioned due date should always be treated as final to avoid any inconvenience.

 Assignment File will be attached Later !

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Replies to This Discussion

Qs= 200+800P

Qd=2000-400P
p=1.5
ye values put krni hain aur phr in ka derivative lena hai... delta means derivative..

wasalam

yeahhh 2nd part is also simple.. just need some clarifications   

variation in elasticity of demand is point ka kia krna ha?

Price Elasticity Of Demand for business travelers = PЄ d

d = Percentage change in Quantity Demanded /Percentage change in Price

Price Elasticity Of Demand = PЄ d = 2, 900 – 2, 800 / 150-200

Price Elasticity Of Demand = PЄ d = 100 / 50

Price Elasticity Of Demand = PЄ d = 2

Price Elasticity Of Demand for Tourists:

Price Elasticity Of Demand = PЄ d = 1, 800-1, 000 / 150-200

Price Elasticity Of Demand = PЄ d = 800 / 50

Price Elasticity Of Demand = PЄ d = 16

check it ye theek ha?

you didn't take the change in percentage.

formula to calculate the percentage change of demand is;

[QDemand(NEW) - QDemand(OLD)] / QDemand(OLD)

formula to calculate the percentage change of price is;

[Price(NEW) - Price(OLD)] / Price(OLD)

thanks 

variation batnai ha in dno ma. ak elastic ha or dosri inelastic ha isi ko explain krna ha kasy ye elestic or inelastic hain 

variation ka mtlb he k unhe ye bta den k elastic / inelastic he? koi page reference he is k bary me to plz share. 

 Urwa mnz hamain yey bbhi batana hoga ky in dono ky darmeyan cross price elasticity hy 

The Case: 
Airline industry is a large and growing industry. It accelerates economic growth, world 
trade, international investment and tourism and is therefore, central to the globalization. 
The airline industry is always dependent on prevailing market conditions. There are lots 
of factors which affect the passenger’s demand for air line’s travel; increase in its prices 
of tickets, oil price, and terrorist throughout the year. Furthermore, market competition 
and other modes of traveling (substitutes) in market like train, car etc. also affect demand 
of airline tickets. If the demand and supply equations for airline tickets are: 
Qs= 200+800P 
Qd=2000-400P 
Requirement: 
a) Find the market clearing quantity and price of airline tickets, also show the 
equilibrium condition graphically. 
b) Find out the price elasticity of demand and price elasticity of supply of airline 
tickets at equilibrium price and quantity. 
c) What will be the effect on the equilibrium level of airline tickets if ticket prices 
increases due to high fuel prices. Illustrate graphically 
(Marks: 5+3+3) 
Part B: 
People travel through air lines for different purposes, like businessmen travel for 
business purpose and tourists for entertainment. Elasticity of demand is different 
for both types of travelers. Suppose that business travelers and tourists have the 
following demand for airline tickets from Lahore to Karachi.

Requirements: 
a) Find the elasticity of demand when price of airline’s tickets rises from $150 
to $200 for business travelers and tourists. 
b) Discuss the variation in elasticity of demand results in part “a” for both types 
of travelers.

Dear Students Don’t wait for solution post your problems here and discuss ... after discussion a perfect solution will come in a result. So, Start it now, replies here give your comments according to your knowledge and understandings....

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