Search & Filtering
Evaluate Eskom product in terms of
*Time
*Nature of product
*Availability of close substitutes
Analyse Eskom in terms of the characteristics of a monopoly
he makes machine. Here is the relationship between the number of workers and he ’s output during a given day:
Workers
Output
Marginal Product
Total Cost
Average Total Cost
Marginal Cost
0
0
--
--
--
1
20
2
50
3
90
4
120
5
140
6
150
7
155
1) Fill in the column of marginal product. What pattern do you see? How might you explain it?
2) A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill in the column for TC (Total Cost).
3) Fill in the column for ATC (Average Total Cost). What pattern do you see? (cf. ATC=TC/Q)
4) Now fill in the column for marginal cost. What pattern do you see? (cf. MC=△TC/△Q)
Describe the role of prices in market economies.
f your opportunity cost of a bottle of wine is $37, which of the following prices would you have to observe in the market in order to sell a bottle of wine?
A. $37.01
B. you would sell a sweater at any of these prices.
C. $37
D. $100
E. $50
what does consumer surplus indicate
profit-maximizing firm in a competitive market is currently producing 110 units of output. It has average revenue of Rs.1000, average total cost of Rs.800, and fixed cost of Rs.20,000.
- What is its profit?
- What is its marginal cost?
- Is the efficient scale of the firm more than, less than, or exactly 100 units?
What happens when a new idea leads to abnromal profit in a monopoly market and how do other firms take advantage of the abnormal profit?
Farmer McDonald gives banjo lessons for $20 an hour. One day, he spends 10 hours planting $100 worth of seeds on his farm. What opportunity cost has he incurred? What cost would his accountant measure? If these seeds yield $200 worth of crops, does McDonald earn an accounting profit? Does he earn an economic profit?
What happens when a new idea leads to abnromal profit in a monopoly market and how do other firms take advantage of the abnormal profit?
