Ms. Zeenia demands 150 units of ice cream at price 50, if the price tends to increase to 60 she reduced her demand by 30 units while a further increase in the price by 10 rupees led to the reduction in the quantity demanded to

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Question 1                                                                                                                 

  1. Suppose Ms. Zeenia demands 150 units of ice cream at price 50, if the price tends to increase to 60 she reduced her demand by 30 units while a further increase in the price by 10 rupees led to the reduction in the quantity demanded to 90 units ceteris paribus. Given the information above drive the demand function.

 

  1. Now suppose the price of milk has increased, illustrates graphically if there would be any change in the demand function elucidated in part a. Also, explain why or why not?

 

Question 2                                                                                                     

  1. Keeping the present rate of inflation (increase in the general price level) in mind, consumers living in Karachi are anticipating that the price of tomatoes will go up just like it did last year in November. In your opinion explain if there would be any impact on the current demand for tomatoes or not. Also, if there would be any change elucidate the movement or shift in the demand curve graphically.

 

  1. Suppose that Zimal and Zawaiyar are the only consumers of perfumes in a particular market. The following table shows their annual demand schedules:

 

Price (Per Bottle of Perfume)

Zimal’s Quantity Demanded

Zawaiyar’s Quantity Demanded

Market Demand

100

600

650

 

200

500

550

 

300

400

450

 

400

300

350

 

500

200

250

 

600

100

150

 


Given the following information construct market demand curve.

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