This document provides the answers to an assignment on the market for rice. It calculates:
1) The equilibrium price and quantity of rice as Rs. 180 and 90,000 units respectively.
2) The price elasticity of supply as 0.47, representing the percentage change in supply relative to a percentage change in price.
3) That a government program increasing the number of rice suppliers would shift the supply curve to the right, decreasing the equilibrium price and increasing the equilibrium quantity of rice.
This document provides the answers to an assignment on the market for rice. It calculates:
1) The equilibrium price and quantity of rice as Rs. 180 and 90,000 units respectively.
2) The price elasticity of supply as 0.47, representing the percentage change in supply relative to a percentage change in price.
3) That a government program increasing the number of rice suppliers would shift the supply curve to the right, decreasing the equilibrium price and increasing the equilibrium quantity of rice.
This document provides the answers to an assignment on the market for rice. It calculates:
1) The equilibrium price and quantity of rice as Rs. 180 and 90,000 units respectively.
2) The price elasticity of supply as 0.47, representing the percentage change in supply relative to a percentage change in price.
3) That a government program increasing the number of rice suppliers would shift the supply curve to the right, decreasing the equilibrium price and increasing the equilibrium quantity of rice.
This document provides the answers to an assignment on the market for rice. It calculates:
1) The equilibrium price and quantity of rice as Rs. 180 and 90,000 units respectively.
2) The price elasticity of supply as 0.47, representing the percentage change in supply relative to a percentage change in price.
3) That a government program increasing the number of rice suppliers would shift the supply curve to the right, decreasing the equilibrium price and increasing the equilibrium quantity of rice.
A. What is the equilibrium price and equilibrium quantity of rice in domestic
rice market. Also show the market equilibrium graphically. Equilibrium price is that price in which quantity demanded becomes equals to quantity supplied. In given question equilibrium price is Rs. 180 is equal to quantity demanded 90,000 Equilibrium Quantity = 90,000 Equilibrium Price = 180 B. Calculate price elasticity of supply when price of rice is rupees 160. Price elasticity of supply = % change in Quantity / % change in Price % Change in Quantity = (Q2– Q1/ Q2+ Q1/2) X 100 = (92000 – 98000 / 92000 + 98000) X 100 = (- 6000 / 190,000) X 100 = - 0.03157 X 100 = - 3.158 % Change in Price = (P2 – P1/ P2 + P1/2) X 100 = (160 – 140 / 160 + 140) X 100 = (20 / 300) X 100 = 0.066 X 100 = 6.666
Price elasticity of supply = % change in Quantity / % change in Price
Price elasticity of supply = - 3.158 / 6.666 Price elasticity of supply = 0.47
C. What does the value of elasticity of supply calculated in part B represent?
Price elasticity calculated in B shows the change which will occur in supply due to change in price. D. Suppose government has given support to rice producers and as a result, numbers of suppliers of rice in domestic market are increased. Graphically analyze the impact of this situation on equilibrium price and equilibrium quantity of rice.