Microeconomics Answers

The behaviour of a firm depends on the features market in which it operates. With reference to the criteria below, identify a relevant Monopoly in South Africa and explain how the selected firm aligns with the market criteria for a Monopoly.

• The number of firms in the market
• The nature of the goods or services sold
• Ease of entry for new competitors into the market
• Control that the firm has over price

Uber has a monopoly on ride-sharing services. In one town, the demand curve on weekdays is given by the following equation: P = 50 - Q. However, during weekend nights, or peak hours, the demand for rides increases dramatically and the new demand curve is P = 100 - Q. Assume that marginal cost is zero.

a. Determine the profit-maximizing price during weekdays and during peak hours. [4]

b. Determine the profit-maximizing price during weekdays and during peak hours if MC = 10 instead of zero. [4]   

c. Draw a graph showing the demand, marginal revenue, and marginal cost curves during peak hours from part (b), indicating the profit-maximizing price and quantity. Determine Uber’s profit and the deadweight loss during peak hours, and show them on the graph. 

Show with empirical evidence the impact of trade unions on employment

Consider a monopolistically competitive market with N firms. Each firm's business opportunities are described by the following equations:

Demand: Q=100/N−P

Marginal Revenue: MR=100/N−2Q

Total Cost: TC=50=Q2

Marginal Cost: MC=2Q

a. How does N, the number of firms in the market, affect each firm's demand curve? Why?

b. How many units does each firm produce? (The answers to this and the next two questions depend on N.)

c. What price does each firm charge?

d. How much profit does each firm make?

e. In the long run, how many firms will exist in this market?

How is short run defined in production theory and does it differ from the long run?.

.If marginal revenue is greater than marginal cost:

A. it will pay the firm to expand production.

B. the firm should leave the level of production unchanged.

C. the firm should cut back on production.

D. profit is at a maximum.

E. only normal profit will be possible.

Why is scarcity a fundamental problem in economics

Explain four reasons why the study of Economics is important to society.

Define labour

Define labour