Economics of Enterprise Answers

3 Suppose that you are the managing director of a firm that supplies three goods: laptops, USB drives and
external hard drives. The price elasticity of the demand for laptops is 2.0; for USB drives it is 1, 00; and for
external hard drives it is 0, 53. The firm is experiencing serious cash flow problems and you have to
increase total revenue as soon as possible. You are in a position to set the prices for these goods. What
would be your pricing strategy for each product? Motivate your decisions.

Suppose a firm produces 20 units of output per month and has a total variable cost of R3 000 per month. If
its average fixed costs are R400 per month, what are its total costs per month?

Explain the implications and short comings of the kinked demand curve in an oligopolistic marke

Suppose a firm produces 20 units of output per month and has a total variable cost of R3 000 per month. If its average fixed costs are R400 per month, what are its total costs per month?

Suppose that you are the managing director of a firm that supplies three goods: laptops, USB drives and external hard drives. the price elasticity of the demand for laptops is 2.0, for USB drives it is 1,00;and for external hard drives it is 0,53. The firm is experiencing serious cash flow problems and you have to increase total revenue as soon as possible. you are in a position to set the prices for these goods. what would be your pricing strategy for each product? Motivate your decisions.

Explain the implications and short comings of the kinked demand curve in an oligopolistic market

Suppose a firm produces 20 units of output per month and has a total variable cost of R3000 per month.If its average fixed cost are R400 per month what are its total cost per month?

Explain the implications and short comings of the kinked demand curve in an oligopolistic market

If Eskom (assumed sole supplier of electricity) is earning economic profits in the short run. Explain using a well labelled diagram how much output Eskom will produce and at what price this output will be sold if Eskom maximises profits.

1.1Explain the implications and short comings of the kinked demand curve in an oligopolistic market.
1.2Using relevant examples differentiate between monopoly and monopolistic competition.

Using properly labelled diagrams illustrate what will happen to the equilibrium price and quantity of muesli (ceteris paribus), in the following scenarios;
1. Research has shown that muesli is good for the heart;
2. The ongoing drought has affected grain (one of the ingredients for muesli) production.