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b) Suggest three (3) other factors that may bring about an increase in the price for houses.
Assume a firm engaging in selling its product and promotional activities in monopolistic competition face short-run demand and cost functions as Q = 20-0.5P and TC= 4Q2 -8Q+15, respectively. Having this information a) Determine the optimal level of output and price in the short run. b) Calculate the economic profit (loss) the firm will obtain (incur). c) Show the economic profit (loss) of the firm in a graphic representation.
You've been hired by an unprofitable firm to determine whether it should shut down its operation. The firm currently uses 70 workers to produce 300 units of output per day. The daily wage (per worker) is 100 ETB, and the price of the firm's output is 30 ETB. The cost of other variable inputs is 500 ETB per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue. You know that the marginal cost of the last unit is 30 ETB. Should the firm continue to operate at a loss? Carefully explain your answer
Given the Production Function Q = 72X + 15X2 - X3, where Q =Output and X=Input (5 marks) a) What is the Marginal Product (MP) when X = 8? b) What is the Average Product (AP) when X = 6? c) At what value of X will Q be at its maximum? d) At what value of X will Diminishing Returns set in?
The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p, is $2, and the price of barley, pb, is $3, and income, Y, is $1000, what is the income elasticity of wheat?
Examine the impact on total revenue in terms of an elastic demand curve and inelastic demand curve. use diagrams to motivate your answer
Coke and Pepsi are perfect substitutes. Initially the price of Coke is higher than the price of Pepsi, later on, Coke reduced its price and become equal to the price of Pepsi, then again after that - Coke re-reduced its price and Pepsi became costlier than Coke. Draw the consumer’s demand curve for Coke using the optimal bundles
Sudhrusti has been working in the banking sector for a long time. She switched jobs and now works for Goldman Sachs and has got a very large salary. She used to mostly eat at her local cheap Chinese restaurant and wore normal clothing, but now she eats at expensive restaurants and wears luxurious clothing. Which type of elasticity of demand concept is best applicable for Sudhrusti changed habit?
When the price of Dragon fruit was Rs. 100 per kg, 200kgs of Dragon fruit were demanded in Bandra market per day. Now the Dragon fruit price has increased to Rs. 110 per kg as a result of which the quantity demanded reduced to 160 kg per day. Calculate the price elasticity of demand by using the mid - point method
The market demand for wheat is Q = 100 - 2p + 1pb + 2Y. If the price of wheat, p, is $2,
and the price of barley, pb, is $3, and income, Y, is $1000, what is the income elasticity of
wheat.
