Eco 401: Assignment Questions And Answers

Assignment ( ECO 401 )
1. Answer to part a. As the market clearing level is the quantity supplied equal to quantity demanded.
Formulas
Qs = 12000 + 50P
Qd = 52000 - 30P
Qd = Qs-----------------(1)
Putting values in the above equation we get,
52000 - 30p = 12000 + 50p
52000 - 12000 = 30p + 50p
40000 = 80p
P = 500
Clearing level of price (P) = 500
Clearing level of quantity (Q) = 52000 - 30P = 52000 - 30(500)
Clearing level of quantity (Q) = 52000 - 15000 = 37000 / 1000 = 37 M/ton

2. Answer to part b. Attached below please.

3. Answer to part c.
Qs = 12000 + 50(350) = 12000 + 17500 = 29500 / 1000 = 29.5 M.ton
Qd = 52000 - 30(350) = 52000 - 10500 = 41500 / 1000 = 41.5