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1. Consider the market supply curve which passes through the intercept and from which the market equilibrium data is known, this is, the price and quantity of equilibrium 𝑷𝑬=𝟓𝟎 and 𝑸𝑬=𝟐𝟎𝟎𝟎.
a. Considering those two points, find the equation of the supply.
b. Draw a graph of this line.
Explain the problem with imposing competitive pricing in the case of a natural monopoly.
Explain the problem with imposing competitive pricing in the case of a natural monopoly.
5. Consider the demand and supply functions for the notebooks market.
𝑄𝐷=10,000−100𝑝 𝑄𝑆=900𝑝
a. Make a table with the corresponding supply and demand schedule.
b. Draw the corresponding graph.
c. Is it possible to find the price and quantity of equilibrium with the graph method?
d. Find the price and quantity of equilibrium by solving the system of equations.
Given utility function U= where PX = 12 Birr, Birr, PY = 4 Birr and the income of the consumer is, M= 240 Birr. A. Find the utility maximizing combinations of X and Y. B. Calculate marginal rate of substitution of X for Y (MRSX,Y) at equilibrium and interpret your result
Illustrate and explain how an increase in household income will affect the equilibrium price and quantity in the market for mobile data
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?
