Economics of Enterprise Answers

Using suitable graphs, briefly explain the behavior and basic characteristics of following oligopoly models a) Sweezy oligopoly model b) Cournot oligopoly model c) Stackelberg oligopoly model d) Bertrand oligopoly model Provide a real -world example of a market that approximates each oligopoly setting, and explain your reasoning e) Cournot oligopoly model f) Stackelberg oligopoly model g) Bertrand oligopoly mode

You are the manager pf a firm that produces and markets a generic type of soft drink in a competitive market. In addition to the large number of generic products in your market, you also compete against major branch such as Coca-Cola and Pepsi. Suppose that , due to successful lobbying efforts of sugar producers in the Sri Lanka, Ministry of Finance is going to levy a Rs. 100 per Kg tariff on all imported raw sugar – the primary input for your product. In addition, Coke and Pepsi plan to launch an aggressive advertising campaign designed to persuade consumers that their branded products are superior to generic soft drinks. How will these events impact the equilibrium price and quantity of generic soft drinks?

 3. You are a member of Board who chairs an ad committee of reforming taxes on telecommunication services. The local telecom tax es can amount to as much as 25 percent of a consumer’s phone bill. The high rates on telecom services have become quite controversial, due to the fact that the deregulation of the telecom industry has led to a highly competitive market. Your best estimates indicate that, based on current tax rates, the monthly market demand for telecommunication services is given by Q=250-5P and the market supply (including taxes) is Q=4P+110 (both in million). The Board of management is considering tax reform that would dramatically cut tax rates, leading to the supply function under the new tax policy of Q=4.171P+110. How much money would typical consumer save each month as a result of proposed legislation? 

1.     Nib Chocolate Company produces 100,000 chocolate bars, which sell for 4 ETB a bar. Variable costs are 3ETB per bar, and it has 150,000ETB fixed operating costs in the short run. Then, (5 pts)

a)     Should the firm keep producing, as profits are ETB 50,000? Why?

b)     Should the firm shutdown, as fixed costs are not being covered? Why?

c)     Should keep producing as variable costs are being met? Why?

d)    What do you think will be the decision of the firm in the long run? 

To simply enacted curriculum and intended curriculum for teachers in Economics class using practical examples?

. Suppose the short run market price a competitive firm faces is Birr 9 and the total cost of the firm is: TC = 200 + Q + 0.02Q 2  (A) Calculate the short run equilibrium output and profit of the firm.