Microeconomics Answers

Blue kashmir sapphires is generally beleived to be a relatively rare gemstone. Use demand and supply curves to illustrate
and explain why such a rare item is sold at such a high price

Suppose you are the managing director of a firm that supplies three goods: laptops, usb drives and external hard drives. The price elasticity of the deman 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 your pricing strategy for each product? Motivate your decisions

if eskom is earning economic profits in the short run. explain using a graph how much output eskom will produce and at what price this output will be sold if eskom maximises ouput

Suppose you are the mananaging 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; 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. (10)

Using relevant examples differentiate between monopoly and monopolistic competition

Using properly labels diagram illustrate what will happen to the equilibrium price and quantity of muesli ( ceteris paribus) in the following scenario.
1. research has shown that muesli is good for the heart
2. the ongoing drought has affected grain ( one of the ingredients for muesli ) productions
3. discuss any three factors that can cause an increase in the demand of mueskil.

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 what price this output will be sold if Eskom maximises profits.

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.

Briefly explain price elasticity of demand and how it is measured

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?