Economics of Enterprise Answers

Market demand for a good is Q=240-3.5P. There are 2 firms on d market and their average cost are constant and 15. What quantity will each produce if they compete according to Betrands Model

a) Using your entrepreneurship knowledge, identify some entrepreneurial opportunities that have been created by COVID 19 pandemic (b) Assess the benefits of Entrepreneurship to your economy (c) Discuss the current limitations to entrepreneurship in your country.

A man borrows ₱6,400 from a loan association. In repaying this debt he has to pay ₱400 at the end of every 3 months on the principal and a simple interest of 16% on the principal outstanding at that time. Determine the total amount he has paid after paying all his debt.

1. Assume the following market demand curve: Q = 13 – 0.5P. Assume marginal cost is constant at $2.

Also assume there is a dominant firm with 6 identical competitive fringe suppliers. .

The following information will be useful for this problem:

           Residual Demand = Market Demand – Fringe Supply

           Total Fringe Supply: 3 + 0.5P

a. Calculate the equilibrium price and quantity for the dominant firm and the average fringe firm.

b. Calculate the value consumer surplus (based on total output--the dominant firm + fringe).

c. Calculate the deadweight loss (based on total output--the dominant firm + fringe).

d. Calculate the profit for the dominant firm.

e. Illustrate the Demand, market price, market quantity, consumer surplus and deadweight loss(based on total output--the dominant firm + fringe) .

1. Suppose that in the year 2015 the number of births is temporarily high. How does this boom in population affect the price of babysitting services in 2020 and 2030? (Hint: five-year-olds need babysitters, while 15-year-olds can be babysitters.)

how are resources allocated with in a market economy

Let the production function of a firm is given as

𝑞=(𝑥0.5 +𝑦0.5)2

Where 𝑥 and 𝑦 are inputs and 𝑤𝑥 is the price of input 𝑥 and 𝑤𝑦 is the price

of input 𝑦.

a) Assume the firm has a limited budget to spend on buying input. Find

the cost-conditional input demand function for each input.

b) Find the cost function of the firm