BDM End Term: 13 September 2026, Set S2 (May 2026 term)

Case Background: The Sivasagar, Assam Flood Economic Shock

The severe floods that struck the Sivasagar and neighboring districts in Assam in July 2026 present a real-world example of how natural disasters shock economic systems. Driven by extreme water levels in the Dikhow River and a devastating breach of the Desang River embankment, the disaster submerged entire towns like Sivasagar and nearby villages.
Floodwaters damaged local retail shops, washed away warehouse stock, and cut off major road transportation networks connecting Sivasagar to neighboring supply hubs like Jorhat and Dibrugarh.
As municipal tap water systems were contaminated and power lines collapsed, local markets experienced two concurrent economic shocks:
1. Supply Shock (Leftward Shift): In areas like Station Chariali, local shopkeepers reported 4 to 5 feet of water entering their stores, destroying stored rations and inventory. Furthermore, submerged roads and railway lines cut off transportation, preventing new inventory from entering the district. This drastic reduction in available goods shifts the supply curve heavily to the left.
2. Demand Surge (Rightward Shift): As tap water became contaminated and power outages halted water pumps, the demand for clean, bottled drinking water skyrocketed. Similarly, panic buying and urgent survival needs caused an immediate surge in the demand for essential commodities like bottled water, dry food kits, and water purification tablets. This shifts the demand curve to the right.
Based on the above data, answer the given subquestions.

During the initial hours of the Dikhow River breach, mechanized country boats and inflatable dinghies were required to evacuate stranded residents from submerged lanes in Sivasagar. Due to blocked arterial highways, local boat operators could not quickly bring additional vessels into the district. When the rental fee per trip jumped from ₹5,000 to ₹8,000, the total number of trips supplied daily rose modestly from 100 to 120. What is the Price Elasticity of Supply (PES) for emergency boat transport, and how is it characterized?

Case Background: The Sivasagar, Assam Flood Economic Shock

The severe floods that struck the Sivasagar and neighboring districts in Assam in July 2026 present a real-world example of how natural disasters shock economic systems. Driven by extreme water levels in the Dikhow River and a devastating breach of the Desang River embankment, the disaster submerged entire towns like Sivasagar and nearby villages.
Floodwaters damaged local retail shops, washed away warehouse stock, and cut off major road transportation networks connecting Sivasagar to neighboring supply hubs like Jorhat and Dibrugarh.
As municipal tap water systems were contaminated and power lines collapsed, local markets experienced two concurrent economic shocks:
1. Supply Shock (Leftward Shift): In areas like Station Chariali, local shopkeepers reported 4 to 5 feet of water entering their stores, destroying stored rations and inventory. Furthermore, submerged roads and railway lines cut off transportation, preventing new inventory from entering the district. This drastic reduction in available goods shifts the supply curve heavily to the left.
2. Demand Surge (Rightward Shift): As tap water became contaminated and power outages halted water pumps, the demand for clean, bottled drinking water skyrocketed. Similarly, panic buying and urgent survival needs caused an immediate surge in the demand for essential commodities like bottled water, dry food kits, and water purification tablets. This shifts the demand curve to the right.
Based on the above data, answer the given subquestions.

In a flooded sub-division of Sivasagar, private fuel distributors face severe logistical delays. The daily market demand and supply curves for diesel (used in backup de-watering pumps) are: • Demand: Qd = 4,000 - 40P • Supply: Qs = 500 + 30P The district administration sets an enforced legal price ceiling of Pc = 30 INR/liter. Unscrupulous middlemen buy up the entire legally supplied quantity at this price cap and divert it to the black market. Assuming buyers are willing to pay the maximum price on the demand curve for that available quantity, what is the resulting Black Market Price (Pbm)?

Case Background: The Sivasagar, Assam Flood Economic Shock

The severe floods that struck the Sivasagar and neighboring districts in Assam in July 2026 present a real-world example of how natural disasters shock economic systems. Driven by extreme water levels in the Dikhow River and a devastating breach of the Desang River embankment, the disaster submerged entire towns like Sivasagar and nearby villages.
Floodwaters damaged local retail shops, washed away warehouse stock, and cut off major road transportation networks connecting Sivasagar to neighboring supply hubs like Jorhat and Dibrugarh.
As municipal tap water systems were contaminated and power lines collapsed, local markets experienced two concurrent economic shocks:
1. Supply Shock (Leftward Shift): In areas like Station Chariali, local shopkeepers reported 4 to 5 feet of water entering their stores, destroying stored rations and inventory. Furthermore, submerged roads and railway lines cut off transportation, preventing new inventory from entering the district. This drastic reduction in available goods shifts the supply curve heavily to the left.
2. Demand Surge (Rightward Shift): As tap water became contaminated and power outages halted water pumps, the demand for clean, bottled drinking water skyrocketed. Similarly, panic buying and urgent survival needs caused an immediate surge in the demand for essential commodities like bottled water, dry food kits, and water purification tablets. This shifts the demand curve to the right.
Based on the above data, answer the given subquestions.

Floods submerge warehouses and wash away road links in Sivasagar. In the market for packaged food, this causes: