At a price of < 5 per unit, a consumer buys 40 units of a commodity. The coefficient of price elasticity of demand is given as (–)2. How many units of the commodity will she buy if the price is reduced by 20 %?

Suppose the demand and supply curves of a commodity X, in a perfectly a competitive market, is given as :

Qd = 2200 – 3p, and

Qs = 1800 + 2p

Estimate the values of equilibrium price and equilibrium quantity of the commodity X.

OR

The market for a commodity is in equilibrium. The supply of thecommodity decreases, without any corresponding change in the demand

for the commodity.

Discuss, using a diagram, the impact of the given change in theequilibrium price and equilibrium quantity of the commodity.

Note: The following question is for the Visually Impaired Candidates only, in lieu of Q. No. 7 (Alternative) :

The market for a commodity is in equilibrium. The supply of the commodity decreases, without any corresponding change in the demand

for the commodity.

Discuss the impact of the given change in the equilibrium price and the equilibrium quantity of the commodity.

Why is the short-run marginal cost curve ‘U-shaped’?

OR

Distinguish between ‘Supply’ and ‘Quantity Supplied’.

Explain the following features of the monopoly market :

(a) Restriction to Entry

(b) Price Discrimination