MANAGERIAL ECONOMICS CASE STUDY ASSIGNMENT ANSWERS – 2020

SECTION “A”
50 Marks
Answer the below questions. Each question carries 10 marks.
1).   Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events.
a).  The market for newspapers in your town
Case 1: The salaries of journalists go up.
Case 2: There is a big news event in your town, which is reported in the newspapers.
 
b).  The market for St. Louis Rams (a professional football team) cotton T-shirts
Case 1: The Rams win the Super Bowl competition.
Case 2: The price of cotton increases.
 
c).  The market for bagels
Case 1: People realize how fattening bagels are.
Case 2: People have less time to make themselves a cooked breakfast.
 
d).  The market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students.
Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
 
2).  Explain the features of Perfect Competition with examples.
3).  Explain graphically, at what point the firm should stop hiring worker in a perfect competitive market Also, list down some of the characteristics of the market form.
4).  Demand of a product is usually very sensitive to economic variables, such as the prices and consumer income. This responsiveness of demand is Compute elasticity in the below scenarios:
a).  Yesterday, the price of envelopes was $3 a box, and Jacky was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Jacky is now willing to buy 8 boxes. Is Jacky’s demand for envelopes elastic or inelastic? What is Jacky’s elasticity of demand?
b).  Katy advertises to sell cookies for $4 a dozen. She sells 50 dozen and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?
 
5).  A market failure occurs when the supply of a good or service is insufficient to meet This results in an inefficient distribution of resources among market participants. Hence government needs to intervene to bring efficiencies. Explain any four tools available for government interventions to deal with the market failures with suitable examples.
 
SECTION “B”
Answer the below questions. Each question carries 25 marks.
1).  Answer the following:
a).  Discuss briefly the supply schedule and the various factors affecting the supply in the market.
b).  Assume the demand being perfectly inelastic and supply suddenly doubles due to innovative technique of Illustrate in a well labelled graph, the changes in the equilibrium price, and quantity, and also is it advisable to do so from supplier point of view.
 
2).  The Telecommunications Regulatory Authority (TRA) is the UAE’s independent industry regulator. Since its launch in 1976, Etisalat has held a monopoly in the market. That changed in 2006 with the emergence of du, which was awarded a 20-year concession to operate fixed-line, wireless, internet and international telecoms services. UAE-based telecom operator recently announced that it was launching Virgin Mobile as a new telecom brand within the country. Assuming the trend continues and the government opens the market for more private and foreign players. You are required to–
a).  Apply your understanding and concepts from microeconomics, to investigate and summarize the major characteristics of the emerging market form in the telecom industry.
b).  Describe and analyze the pricing policies that you would expect to find in this industry.
c).  Explain the profit maximization strategy of this market form with the help of a suitable graph.
 

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