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ECO401 Economics Assignment 01 Fall 2021 Solution / Discussion

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ECO401 Economics Assignment 01 Fall 2021 Solution Link 

ECO401-Assignment-01-Solution-Fall-2021_VU_Ning.pdf

ECO401 ASSIGNMENT 1 SOLUTION FALL 2021 

 

Due Date: 9 Dec 2021

 

Requirement A:

Calculate the equilibrium price and equilibrium quantity of renewable energy resources.

 

Solution:

 

Qd = 20,000 - 3P -----(I)

Qs = 15,000 + 2P-----(II)

Qd = Qs

20,000 – 3P = 15,000 + 2P

20,000 – 15,000 = 2P +3P

5,000 = 5P

5,000 / 5 = 5P/5

1000 = P

P = 1000

 

Then, Putting the value of price in any of Qd or Qs equation for finding “Equilibrium Quantity”

 

According to Qd Equation:

Qd = 20,000 – 3(1000)

Qd = 20,000 – 3,000

Qd = 17,000

 

According to Qs Equation:

Qs = 15,000 + 2(1000)

Qs = 15,000 + 2000

Qs = 17,000

The equilibrium price “P” is Rs.1000 & the equilibrium quantity is Rs. 17,000.

 

Requirement B:

Calculate the price elasticity of supply using point elasticity method when the renewable energy sector is in equilibrium. Also, interpret the result.

 

Solution:

Qs = 15,000 +2P

d/dP (Q) = d/dP (15,000 + 2P)

dQ/dP= d/dP(15,000) + d/dP (2P) dQ/dP= 0+2

dQ/dP=2

 

we know that,

PЄs=Percentagechange in Quantity Supplied/ Percentagechange in Price PЄs = dQ/dP x P/Q

 

PЄs = 2 x 1000/17,000 PЄs = 2000 x 17,000

PЄs = 0.11 0r 11% 

So, this is Inelastic.

Requirement C:

What will happen to the equilibrium quantity and equilibrium price of renewable energy resources if the energy sector improves the technology? (Graph is not required)

 

Solution:

If the energy sector improves its technology, then, equilibrium quantity will increase and equilibrium price will decrease. 

As well as the effect on supply will increase and it shifts Rightward in direction of the shift in the supply curve.

One more ECO401 Solution file link 

ECO401-Assignment-1-Solution.docx

#ECO401 #ECO401Economics #VUECO401AssignmentNo
ECO401 Assignment No. 1 Solution Fall 2021 | ECO401 Assignment 1 Fall 2021

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ECO401 Assignment 1 Solution Fall 2021 | ECO401 Assignment 1 Solution 2022

SEMESTER FALL 2021
ECONOMICS ( ECO401 )
ASSIGNMENT NO.1
DUE DATE: DECEMBER 09, 2021
MARKS: 10
The Case:
The Government of Pakistan is emphasizing on the consumption of indigenous and
environmentally clean energy generation resources. Alternative Energy Development
Board (AEDB) is established by the government, responsible for the growth of renewable
energy sector; the advancement of alternative and renewable technologies is among one
of the top priorities of the government. Several initiatives have been taken to create
favorable environment for the sustainable growth of Alternative Renewable Energy
(ARE) Sector in Pakistan in order to control and make potential use of indigenous
renewable energy resources. Suppose the quantity demanded and quantity supplied
functions for renewable energy resources are as given below:
Qd = 20,000 - 3P
Qs = 15,000 + 2P
Where ‘P’ is the price in rupees of a renewable energy resources, ‘Qd’ is quantity
demanded for renewable energy resources, and ‘Qs’ is quantity supplied for renewable
energy resources.
Requirements:
a) Calculate the equilibrium price and equilibrium quantity of renewable energy
resources.
b) Calculate price elasticity of supply using point elasticity method when renewable
energy sector is in equilibrium. Also, interpret the result.
c) What will happen to the equilibrium quantity and equilibrium price of renewable
energy resources if energy sector improves the technology? (Graph is not
required) Assignment Solution

Eco401 Assignment No 1 Solution Fall 2021

ECO401 Assignment 1 Solution Fall2021/Complete Detail #vu #eco401#vuassignmentsolution

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ECO401 Assignment 1 Solution Fall 2021 Complete Solution II How to Make Eco401 Assignment 1 2021?

#ECO401 #ECO401Economics #VUECO401AssignmentNo
ECO401 Assignment 1 Solution | Fall 2021

ECO401 Assignment-01 Complete easy Solution | Complete way to create and submit assignments.

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