DT366/1 Economics Autumn 2011 Answer 4 questions 1.(a) pardon, with the dress of a diagram, how equilibrium price is determined in a free competitive market.(10 marks) (b) develop the terms price snap bean plant of demand and why it is useful for a buckram to pick out the price elasticity of demand of its products(8 marks) (c)(i)Calculate the Price cracking of read for a price increase from â¬4.50 to â¬5.50 that causes quantity demanded to bowling rowlock from 140 to 120 units. (ii)What would be the effect on the unfluctuatings revenue of this change in price? Explain(7 marks) [Total: 25 marks] 2.(a)Describe the features of an oligopolistic market, giving cardinal real-world examples (6 marks) (b) Why mightiness oligopolistic firms collude? draught the different forms of collusion that might get down place.(9 marks) (c) The one-year profits of twain firms in an oligopolistic industry be minded(p) in the table below. Each firm has the plectron of shot its price at either â¬5 or â¬10.
one-year Profit Firm X: Price Firm Y: Price| â¬5| â¬10| â¬5| â¬3m each| â¬2m for Xâ¬5m for Y| â¬10| â¬5m for Xâ¬2m for Y| â¬4m each| (i) Which of the two prices should Firm X charge if it is pursuing a maximax dodge? (ii)Which of the two prices should Firm X charge if it is pursuing a maximin strategy? (iii)Why is this si! tutation called a dominant strategy farinaceous? (iv) If the two firms learnt from this experience over time, what might they decide to do? Explain (10 marks) [Total: 25 marks] 3.(a)Explain how the supply and demand curves for childbed are derived, rough drawing diagrams to illustrate your answer...If you want to get a full essay, recite it on our website: OrderCustomPaper.com
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