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a) If market price of wheat is Rs.1300 per ton. Qd = 1666000 Qd / Qp = 2570 Є = 2.005

b) If market price of sugarcane is Rs. 180 per ton. Qd = 73200 Qd / Qp = 700 Є = 1.72

Dear How do u calculate 2nd question.My calculations are:

QD = 73200

QP = 340

  340*180/73200

Є = 0.84

  1. If market price of wheat is Rs.1300 per ton.

Solution:

Qd=15000-30P+ P2

Qd=1500-30(1300) + (13002)

Qd=15000-39000+ 1690000

Qd=1666000

Dq/ Dp     =-30 +2P

Dq/ Dp     =-30+2p

Dq/ Dp     =-30+2(1300)

Dq/ Dp      =2570

The formula of elasticity = (Dq/Dp) (P/Q)

                                       = (2570) (1300/1666000)

                                       =2.01

  1. If market price of sugarcane is Rs. 180 per ton.

Qd=12000-20P+2P2

Qd=12000-20(180)+2(180)2

Qd=12000-3600+64800

Qd=7320

Dq/ Dp=-20+4P

 Dq/ Dp  =-20+4(180)

       Dq/ Dp    =-20+720

Dq/ Dp    =700

The formula of elasticity = (Dq/Dp) (P/Q)

                                         =    700(180/7320)

                                        =     1.72

Q2. ?.

Idea!

RATIONING & SUPPLY SHOCKS (ALTERATION OF EQUILIBRIUM PRICE BY THE GOVT) There are two ways for this: 1. Through Tax : Tax (to be paid by the producer) will increase the Supply Price, Supply Curve shifts left ward, Price increases & quantity decreases. 2. Through Subsidy : Subsidy (given to the producer) will decrease the Supply Price, Supply Curve shifts rightward, Price decreases & quantity increases .

Handouts Page No.18

plzzzz send here qu 2

you slove the 2 question if u done then help me

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