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For product y (i.e. not product x), find own price elasticity of demand, income elasticity of demand and cross-price elasticity of demand. Briefly explain/interpret each of these three numerical results.
Desire the income offer curves and engel curves for commodity x for the following utility functions , assuming Px=Py=1. a) u(x,y) = max(2x,3y). b) u(x,y)= x-y
Given market demand Qd = 50 - P, and market supply P = Qs + 5
A) Find the market equilibrium price and quantity?
B) What would be the state of the market if market price was fixed at Birr 25 per unit?
C) Calculate and interpret price elasticity of demand at the equilibrium point.
The demand for tickets to an Ethiopian camparada film is given by D(p)=20,000-10,000p, where p is the price of tickets. If the price of tickets is 12 birr. Calculate price elasticity of demand for tickets and draw the demand curve?
a) Suppose the demand for a product is given by p=d(q)=-3q²+6q+436 where q is the quantity and p is the price in Ghana Cedis. Using calculus, estimate the effect of an increase in price from GH¢196.00 to GH¢250.00 on the welfare of the consumer.Using the concept of own elasticity of demand, decide whether the producer should accept this price increase in order to increase revenue.
Distinguish the difference between monopsony and monopoly. Provide two graphical
illustrations to aid your discussion when comparing monopsony and monopoly. [6]
The market for electricity in Utopia is characterised by the following equations
Qd = 100-5P ; Qs = 50+5P
(b) Suppose the government of Utopia set a maximum price of R2.50 per unit of electricity. Explain and show in the graph drawn in (a) the effect of the government intervention in the electricity market.
An employer has dedicated considerable resources to the training of an employee, but after a year, he finds the employee’s performance not up to the mark. He is thinking of letting the employee go but is hesitant because of the cost he has incurred in the training. What will your advice to the employer be?
Distinguish between substitutes and complements using cross price elasticity coefficients to motivate your answer.
Suppose the price of Fanta falls from R18 to R14 per bottle, and the quantity demanded rises from 250 to 400 bottles a day.
Calculate the price elasticity of demand using the point elasticity formula and
Comment on the behaviour of demand for Fanta, based on the price elasticity of demand calculated in 1.1.1 above
