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Elasticities of Demand and Supply Assignment

The assignment for the Microeconomics course at IBA focuses on the elasticities of demand and supply, with a submission deadline of November 16, 2025. It includes three questions requiring calculations of price elasticity of demand, cross-price elasticity of demand, and price elasticity of supply, along with classifications and discussions on elasticity types. Students are instructed to show all calculations clearly, avoid plagiarism, and ensure timely submission.

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4 views1 page

Elasticities of Demand and Supply Assignment

The assignment for the Microeconomics course at IBA focuses on the elasticities of demand and supply, with a submission deadline of November 16, 2025. It includes three questions requiring calculations of price elasticity of demand, cross-price elasticity of demand, and price elasticity of supply, along with classifications and discussions on elasticity types. Students are instructed to show all calculations clearly, avoid plagiarism, and ensure timely submission.

Uploaded by

unasbaig17
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Institute of Business Administration IBA – Department of Economics

Microeconomics

Assignment: 4

Elasticities of Demand and Supply

Submission Date: 16/11/2025

Instructions:
Show all your calculations clearly. Mention your Name, ERP ID, on the first page. Use, proper
handwriting, keep your work clean and organized. Practice solving questions by yourself.
Do not copy from friends, books, or the internet without understanding. Late submissions
will not be accepted

Question 1: The price of petrol increases from Rs. 250 to Rs. 275 per liter, and as a result,
the quantity demanded falls from 100,000 liters per day to 90,000 liters per day.

a. Calculate the price elasticity of demand

b. Classify the elasticity (elastic, inelastic, or unitary).

Question 2: The price of Pepsi rises from Rs. 60 to Rs. 70 per can, and the quantity
demanded of Coke rises from 20,000 to 24,000 cans.

a. Calculate the cross-price elasticity of demand.

b. Are Coke and Pepsi substitutes or complements? Explain.

Question 3: Consider wheat farmers in Punjab. The price of wheat increases from Rs. 40
per kg to Rs. 46 per kg after the harvest season. As a result, the farmers increased their
production from 1,000 tons to 1,050 tons in the following year.

a. Calculate the price elasticity of supply

b. Discuss whether the supply of wheat is elastic or inelastic.

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