Economics of Enterprise Answers

Kate wants to start a small catering business in her area. she has already established the necessary skills and abilities as well as the required resources to start the new venture. Which is the next step in the entrepreneurial process that she needs to follow?

Demand for hand sanitizer is surging around the globe as the new coronavirus spreads, prompting retailers to ration supplies and online vendors to hike prices. Sales of hand sanitizers and similar products have swelled across several international markets since the COVID-19 outbreak began in January. The virus, which originated in China, has now spread to more than 60 countries. According to data published Tuesday by market research firm Kantar, U.K. hand sanitizer sales saw a year-on-year increase of 255% in February. Meanwhile, British shoppers were buying 7% more liquid hand soaps and spent 10% more on household cleaners compared to February 2019. (Source: CNBC, 3rd March 2020

ii. Due to high demand of hand sanitizer, it will lead to increases of price by producers. Based on your opinion, what should a government do to control the price of hand sanitizer to keep hike during the pandemic.

Demand for hand sanitizer is surging around the globe as the new coronavirus spreads, prompting retailers to ration supplies and online vendors to hike prices. Sales of hand sanitizers and similar products have swelled across several international markets since the COVID-19 outbreak began in January. The virus, which originated in China, has now spread to more than 60 countries. According to data published Tuesday by market research firm Kantar, U.K. hand sanitizer sales saw a year-on-year increase of 255% in February. Meanwhile, British shoppers were buying 7% more liquid hand soaps and spent 10% more on household cleaners compared to February 2019. (Source: CNBC, 3rd March 2020

ii. Due to high demand of hand sanitizer, it will lead to increases of price by producers. Based on your opinion, what should a government do to control the price of hand sanitizer to keep hike during the pandemic.

Given the demand function. P=16𝑒−0.02𝑄

• Determine the quantity and price at which total revenue will be maximized.

• test the second-order condition.

Differentiate the following logarithmic functions and show that 𝑦=𝑙𝑛(𝑥+5)2≠[ln⁡(𝑥+5)]2

The value of the rice grows according to the function, 𝑉=𝑘𝑒2√𝑡, how long should the dealer store the rice.

Has the bank of Canada done anything to influence the supply of money?  Have interest rates been adjusted for this current climate?  (Application - 2 marks)

Graphically show the impact of tariffs on supply and demand

If demand function is given as the following: 

Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A 

Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent. 

Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000

a) Should the firm consider giving a price discount in order to increase total revenue?

If demand function is given as the following: 

Qz = 230 -2.75 Pz + 0.5 I + 1.2 Pm + 0.6A 

Where Qz is quantity of Good z sold, Pz is price of Good z per unit, I is per capita income, Pm is price of competitor and A is the amount of advertising spent. 

Current values:  Pz= RM 55 I= RM 9000    Pm= RM 50    A =RM 12,000

Determine the total revenue maximizing price and quantity.