Assignment 01

Business Economics – Sunday, 3-6

Due date: November 01, 2020
Total Marks: 05

Name: _______________________ Campus: _________________

Enrollment ID: ________________
Question 1 2.5 Marks
a. 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.

b. 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 2.5 Marks

a. 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.

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

Zawaiyar’s
Price (Per Bottle of Zimal’s Quantity
Quantity Market Demand
Perfume) Demanded
Demanded
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.