Economics Answers

Explain using properly labelled diagrams, why a perfectly competitive firm will earn only normal profit in the long-run.

The sales data for the Lodestar Sport Apparel company for the last 12 years are as follow

Recession come at( which decline in spending is larger)

A decrease in the price of a product from R50,00 to R40,00 causes the quantity demanded to
increase from 2 500 to 3 000 units. Using the arc elasticity of demand, the price elasticity of

Samantha owns and runs her own private ladies beauty clinic. She recently erected a billboard just outside the gates of the premises at a cost of R40 000. She pays R300 monthly for a small advert space in the local gazette. The local municipality fined Samantha R10 000 for placing the billboard on a public property without authority. She paid a further R3000 to have the billboard moved within the premises. She also paid R2000 to print pamphlets distributed on Women’s Day.
You are required to:
Discuss whether the expenses and losses are deductible under the general deduction formula.

A community in Northern Namibia produces only two goods,TVs and CD's. With the aid of properly labelled production possibilities curve illustrate each of the following (putting TVs on the vertical axis).2.1.1 A shift in production from CD's (service) towards TVs(goods). 2.1.2 An increase in the potential output of the community due to a greater availability of the factors of production.

Each of the normal students will demand courses in the amount:
QN= 100 – 0.25 P where Q is the number of course-hours per academic year and P is the price per course-hour. Each of the workaholics, on the other hand, has a demand of:
QW= 200 – 0.5 P The school will admit 180 students from each group. (Students may choose not to enroll.) The marginal cost to the School is constant at $100 per student course-hour. Sloan’s fixed cost is $2.0 million per year. For each of the following pricing schemes, please derive the optimal price structure and the total profit, on the assumption that the School’s objective is to maximize profit from the MBA program. a. A single fixed tuition per academic year (with a zero price per course-hour), with no limit on the number of course hours. Hint: Sloan may decide to induce both types of students to enroll or just the workaholics

A product is being priced at 100€ and is being sold 3,000 times. The price elasticity is estimated to be -2.0. By how much would the revenues change when increasing the price by 5%? (Negative if a decrease and positive if an increase)

Investigate and discuss the main determinants that affect the level of housing supply in the UK housing market

1.Assume that electricity production has been done by several regional firms in the U.S. each operating as a pure monopoly.
a. Explain and graphically illustrate how the electrical monopolist would determine its profit maximizing price and output level. (Label Pm and Qm)
b.Identify any area of consumer and/or producer surplus for the profit maximizing monopoly.
c.Identify the deadweight loss for the monopolist.