Search & Filtering
3.1 IDENTIFY the role players and drivers that create the need for a new product (please note this question refers to the need and does not require you to identify the people involved in the development of the new product). Consider the following role players:
3.1.1 Internal
3.1.2 External and market
3.1.3 Regulatory
EXPLAIN how the product pricing (fee) is determined and DISCUSS the importance of determining the correct fee
The inverse of the demand and supply functions for shoes is given by the
following equations respectively:
Demand: P = 1400 - 2Qd
Supply: P = 200 + 1Qs
1.1. Calculate the equilibrium price and quantity of shoes.
(5)
1.2. Assume that the price of shoes is R700. Use your answer in 1.1 to explain
the resulting situation in the market for shoes, and how equilibrium will
be restored without government intervention, ceteris paribus.
(5)
(a) Suppose the GDP per capita (income) has increased from $5000 to $10,000, whereas the demand for luxury apartments has increased from 1000 to 2000, whereas the demand for burgers has increased from 10,000 to 12,000. Calculate the income elasticity of demand for apartments and burgers
Explain price discrimination. What are the conditions to make price discrimination effective? Provide your answers with examples from the Airline Industry.
What is perfect competition
Q1. Martha is preparing for exams in economics and sociology. She has time
to read 40 pages of economics and 30 pages of sociology. In the same
amount of time, she could also read 30 pages of economics and 60 pages of
sociology.
(a) Assuming that the number of pages per hour that she can read of either
subject does not depend on how she allocates her time, how many pages
of sociology could she read if she decided to spend all of her time on
sociology and none on economics?
(b) How many pages of economics could she read if she decided to spend
all of her time reading economics?
Identify a newspaper article that illustrates a market failure in your assigned
Caribbean country. Ensure that you provide a screenshot of the article in your
submission.
NOTE: Only the following market failures should be examined: public good,
asymmetric information, positive or negative externality.
(i) Provide a brief summary of the main points in the article. (Maximum 30 words)
(2 marks)
(ii)Identify the type of market failure being discussed in the article and discuss why
market failure occurs in this scenario. (3 marks)
(iii) Suggest a relevant government policy that would yield the efficient outcome and
carefully explain the process through which the implementation of the
government policy will lead to the optimal outcome. (Maximum 30 words)
(4 marks)
(iv) How will the imposition of the chosen government policy impact consumer
surplus, producer surplus and total surplus in this scenario? (Maximum 30 words
What is the difference between a movement along the aggregate demand (AD) curve and a shift of the aggregate demand curve? Explain in terms of what causes a movement and what causes a shift.
You are the manager of a monopoly that faces an inverse demand curve described by P = 200 − 15Q. Your costs are C = 15 + 20Q. The profit-maximizing price is
a. $135
b. $110
c. $20
d. $290
