' ' ' - LJ Q2. Calculate elasticity values for part a Must: show all calculaons): [3] (a) Suppose rm XYZ {selling good it} has calculated its demand function from its past data 8: related variables and it arrives at the following demand function: Dir: 11000 200 Px'l' 2Py+ .051 1Where: P3, P3, and I stand for price of good 3:, price of related good y and average income respectively. If given values are P31: Rs. 500 andI = Rs. 40,000 then: i. Write the equation for demand curve for good 1:. ii. If supply of X is given by: SK: 3000 +200 PX, then make a demand and supply schedule for good X for prices points: 50, 45, 40, 35, 30, 25, 20 and 15 (all prices in rupees) iii. 1What are equilibrium quantities of demand and supply 8: equilibrium price? iv. What will happen to the demand curve if the income increases by 10%? Show your answer graphically. {b} Mr. Shiva has inherited a piece of land from his father, which he has converted to a fruit orchard with 700 mango 11'ees at zero cost. Each tree is leased out for the season at a rental price. The demand curve for trees is given by: Q], = 1200 1.5 P]., then*: [2] i. At what quantity Sr. price value will the rm maximize TR? ii. If after a month he starts incurring a maintaiuace cost of Rs. 200 per tree, then how will optimum quantity and TR change? Show all calculations