Economics of Enterprise Answers

Do=1500-10Po+4Y+Pa
So=800+2Po
Find demand equation for oranges in terms of price for oranges( Po),when Y is ₹500 and Pa is ₹60.
Find equilibrium price and quantity.
What is the excess demand or supply if government sets the price ₹250.

Suppose that the demand for as popular brand of coffee drink is given by the equation
Qx=15-2PX+0.0011+5Py
Where :Qx= monthly consumption of the coffee per family in cup.
Px=price per cup often the coffee drink =3birr.
I=median annual family income =10000birr.
Py=price per cup of as competing brand often coffee drink =3birr.
Required :
1. Interpret the parameter estimates
2. Calculate the monthly consumption if the coffee given the parameters
3. Rewrite the demand function
4. Suppose that as median annual family income increased to 10000. How does this change the answer to part b.

Suppose that the total cost function of am firm is given as TC=2000+20Q(square )
Determine the out put level that minimizes average total cost (ATC).at this out put level, what is TC? ATC? MC? verify that at this out put level MC=ATC,and that ATC intersects MC from below.
Determine the out put level that minimizes average variable cost (AVC).

Suppose the market demand and supply equations for as product are
Qd = 25-3p
Qs=10+2p
What are the equilibrium price quantity for this product?

1. The demand for petrol rises from 500 to 600 Barrels when the price of a particular scooter is reduced from Birr. 25000 to Birr.22000. Find out the cross elasticity of demand for the two. What is the nature of their relationship?
A company has the following demand equation
Q= 1000–3000P+10A
Q = Quantity demanded
P = Product Price
A = Advertisement expenditure
Assume that P = 3 and A = 2000
2. Suppose the firm drops the price to Birr. 2.50 would this bebeneficial.
3. Suppose the firm raises the price to Birr. 4.00 While increasingits advertisement expenditure by 100 would this be beneficial? Explain

The demand of a good is D=100-9.4P; the supply of it is S=9.2P-35. At the current market price, there is a surplus of a 9.0 units on the market. Please find the current market price.

2.Southwest Airlines is known for offering cut-rate promotional fares to build customer awareness, increase market share and boost revenues in new markets. Would you expect total revenue to be maximized at an output level that is typically greater than or less than the short-run profit-maximizing output level? Is such an approach incompatible with long-run profit maximization?

“Cash transfer programmes could influence the behaviour of recipients in ways that could undermine the poverty‐alleviating effects and cost‐effectiveness of these interventions” (Black et al. 2017).
Do you agree with this statement?

Analyse the use of subsidies in South Africa as a means of redistributing income, focusing on the costs and benefits of the program.

A hamburger producing company’s variable cost per hamburger Is 15.50 taka and fixed cost is
2, 20,000/- taka. The company’s expected sales of hamburger are 40,000 pieces. Based on this context,
answer the following questions:

Q1: How many hamburgers the company has to sell to achieve neither profit nor loss situation? (show
the step by step calculation)

Q2: What is the minimum number of hamburgers the company has to sell to make profit?

Q3: How many hamburgers the company has to sell to incur minimum amount of loss?