Economics of Enterprise Answers

Explain the fundamental factors considered when making decisions to achieve various goals of a firm?

The lockdown around the world has caused the rapid growth in the electronic market as people have shifted from conventional methods to the new methods for imparting knowledge and staying connected. If demand and supply function are given as:
Qd= 65 – 10P Qs= -35 + 15P
a. Find the equilibrium price and quantity and show it on labeled D/S diagram.
b. How do you interpret market equilibrium: (i) if P= Rs.6? (ii) if P=2?
c. Show on the Demand-Supply diagram in (a), the graphical interpretation of your answer of (b).

Assume Tea brands ChotooChai and BaraChai are competing brands in the market. With arrival of winter season, ChotooChai announces good promotional deals. Using ‘Comparative Statics Analysis’ of demand and supply model:
a. How will the managements of the two brands study the short-run and long-run impact on Tea Sales, after the announcement of promotions in the market of Tea?
b. Demonstrate and explain, with clearly labelled two panel diagrams, the ‘Rationing Function’ and the Allocating or ‘Guiding Function’ of Price.

Khurram Ali is negotiating his employment contract. His opportunity cost is 15%. He has been offered two possible 4-year contracts. Payments are in Pakistani rupees and are guaranteed, and they would be made at the end of each year. Terms of each contract are as follows:

Contract Year 1 Year 2 Year 3 Year 4
Contract 1 4 Million 4 Million 4 Million 4 Million
Contract 2 10 Million 1 Million 1 Million 1 Million

As his financial adviser, which contract would you recommend that he accept?

A government is planning to build a high speed railway through a large area of fertile land and scenic beauty. A decision to construct the railway will depend upon how the project is financed and the social costs and social benefits arising from its construction. Explain, with the aid of examples from the construction of a railway, the meaning of social costs.

Money and Banking Economy Homework Question Chapter 1

Assume Tea brands ChotooChai and BaraChai are competing brands in the market. With arrival of winter season, ChotooChai announces good promotional deals. Using ‘Comparative Statics Analysis’ of demand and supply model:
a. How will the managements of the two brands study the short-run and long-run impact on Tea Sales, after the announcement of promotions in the market of Tea?
b. Demonstrate and explain, with clearly labelled two panel diagrams, the ‘Rationing Function’ and the Allocating or ‘Guiding Function’ of Price.

Demand for Orange Juice is given as
Qd = 5000 – 2500 P + 1200 I + 650 E – 255 Ps
Suppose Income is I = Rs.500, Expectations E = 55, and Price of Ps = Rs 25.
a. Find the Demand Equation.
b. Using the demand function from part a.,
Calculate Elasticity of Demand for price range of Rs.125 and Rs.155.
c. What will be the ‘Price Elasticity of Demand’ at P = Rs.125?
d. Interpret the Elasticity of Demand calculated in (C) above.

explain, using examples, the difference between the following:

Market Process and Traditional Process

The Mohan Bagan football team plays in a stadium with a seating capacity of 1,80,000. How
ever, during the past season, attendance averaged only 1,50,000. The average ticket price was 30. If price elasticity is -4, what price would the team have to charge in order to fill
27 and the average attendance increased the stadium? If the price were to be decreased to
to 1,60,000, what is the price elasticity?