Salford Marketing Managment_Services marketing - Mid Term Assignment
Assignment for Mid Term
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ASSIGNMENT FOR MID TERM Economics for Managers Prepare answer the following questions: Q#01. ) Define ‘demand’ and ‘law of demand’. Distinguish between a change in demand and change in quantity demanded noting the causes of each. b) What are the determinants of demand? Show the effect on demand for changes of prices of the related goods. c) From the demand function Q dx = 40 – 5P x (P x is given in taka), derive the demand schedule and the draw the demand curve. Q#02. a) Define ‘supply’ and ‘law of supply’. Distinguish between change in supply and change in quantity supplied. b) What are the determinants of supply? Show the effect on supply for introducing modern technology in the production. c) Suppose a supply function of a producer is as Q sx = -40 +5P x . Derive the supply schedule and draw the supply curve of the producer. Q#03. If the equation for a market demand curve is Q dx = 40 – 4P x and the equation for the market supply curve is Q sx = 4P x (P x is given in taka). Find the market equilibrium price and quantity. Show the equilibrium point graphically. Q# 04. a) What is the price elasticity of demand? How is it related to the demand curve? b) Show the relationship between price elasticity of demand (E p ) and total revenue (TR). c) Draw three demand curves with elasticities (i) zero (0) (ii) infinity (∞) and (iii) one (1) and explain the implications of the curves. Q# 05. a) How do you define income elasticity and cross price elasticity of demand. Comment on the nature of goods: i) When the value of cross price elasticity of demand – 2.3 and 1.25 and ii) the value of income elasticity of demand 0.58 and 1.58. b) Find the cross price elasticity of demand (E XY ) between tea (X) and sugar (Y) for the data in the below table:
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Transcript of Assignment for Mid Term
ASSIGNMENT FOR MID TERMEconomics for Managers
Prepare answer the following questions:
Q#01. ) Define ‘demand’ and ‘law of demand’. Distinguish between a change in demand and change in quantity demanded noting the causes of each. b) What are the determinants of demand? Show the effect on demand for changes of prices of the related goods.c) From the demand function Qdx = 40 – 5Px (Px is given in taka), derive the demand schedule and the draw the demand curve.
Q#02. a) Define ‘supply’ and ‘law of supply’. Distinguish between change in supply and change in quantity supplied.b) What are the determinants of supply? Show the effect on supply for introducing modern technology in the production.c) Suppose a supply function of a producer is as Qsx = -40 +5Px. Derive the supply schedule and draw the supply curve of the producer.
Q#03. If the equation for a market demand curve is Qdx = 40 – 4Px and the equation for the market supply curve is Qsx = 4Px (Px is given in taka). Find the market equilibrium price and quantity. Show the equilibrium point graphically.
Q# 04. a) What is the price elasticity of demand? How is it related to the demand curve?b) Show the relationship between price elasticity of demand (Ep) and total revenue (TR).c) Draw three demand curves with elasticities (i) zero (0) (ii) infinity (∞) and (iii) one (1) and explain the implications of the curves.
Q# 05. a) How do you define income elasticity and cross price elasticity of demand. Comment on the nature of goods: i) When the value of cross price elasticity of demand – 2.3 and 1.25 and ii) the value of income elasticity of demand 0.58 and 1.58.b) Find the cross price elasticity of demand (EXY) between tea (X) and sugar (Y) for the data in the below table:
Identify the nature of relations of the commodities on the basis of calculated cross elasticity.
Q# 06. Define production function. Illustrate the relationship between total product (TP), marginal product (MP) and average product (AP).
Q# 07. a) Define total cost (TC), total fixed cost (TFC) and total variable cost (TVC) and graphically represent the curves. b) Discuss the relationship between AFC, AVC, AC and MC and show graphically.
Commodity Before AfterPrice (Tk/unit) Quantity
(units/month)Price
(Tk/unit)Quantity
(units/month)Tea (X) 3.00 45 3.00 60Sugar (Y) 45.00 90 30.00 120
Q# 8. i) Suppose, the cost function of a company is given with the following equation: TC=70+22Q+1.5Q2, where TC = Total Cost (in thousand), Q = Quantity produced per period.Calculate the total fixed cost (TFC), average total cost (AC), average variable cost (AVC), and marginal cost (MC) and plot them on graph.ii) Show in a table the average variable cost (AVC), average cost (AC) and marginal cost (MC) assuming the different levels of output (Q) from the given following cost functions: TC = 100 + 60Q + 3Q2. ii) Plot them on a graph.
9. a) What is perfect competition? How does the firm maximize profit in the short run in a perfectly competitive market? Explain. b) What are the characteristics of the perfect competitive market? Illustrate the break even point and shut down point of the perfect competitive market.
10. i) Suppose price (P) function of a firm is given as P = 100 – 2Q and the total cost function (TC) is given as TC = 10 + 0.5Q2. Find the quantity of output (Q) that maximizes the firm’s profit and the total profit of the firm.ii) Suppose price (P) function of a firm is given as P = 170 – 5Q and the total cost function (TC) is given as TC = 40+50Q+5Q2. Find the quantity of output (Q) that maximizes the firm’s profit and the total profit of the firm.iii) Given the following total revenue (TR) and total cost (TC) functions for different firms:
TR = 1400Q - 6Q2 and TC = 1500 + 80Q(i) Find out the profit maximizing output(ii) Calculate the maximum profit and test the 2nd order condition.
iv) Suppose that you are the owner and operator of a perfectly competitive firm with the following total cost (TC) function and Total Revenue (TR) Function: TC = 2000 +10Q+0.02Q2 and TR=25Q. Find the quantity of output (Q) that maximizes the firm’s profit and the total profit of the firm.
