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# Apply Economic Principles to Work in the Financial Services Industry

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APPLY ECONOMICPRINCIPLES TO WORK INTHE FINANCIALSERVICES INDUSTRY
ASSESSMENT TASK 1PART 1: Practical Exercises: Economic PrinciplesPrice elasticityPrice (\$)Quantity demandedElasticity coefficient111250A101350B91450C81550Da.) elasticity of coefficient using arc methodFrom the above table, according to point A to B price decreases from \$11 to \$10 andquantity demanded increases from 1250 to 1350. Using these formulas for percentage change inprice and quantity are as follows- = [1250-1350/1250+1350] / [11-10/11+10]= [-100/2600] / [1/21]= [-0.038]/ [0.047]= -0.81From the above table, according to point B to C price decreases from \$10 to \$9 andquantity demanded increases from 1350 to 1450. Using these formulas for percentage change inprice and quantity are as follows-= = [1350-1450/1350+1450] / [10-9/10+9]=[-100/ 2800] / [1/19]1
=[-0.035] / [0.052]= -0.67From the above table, according to point C to D price decrease to \$9 to \$8 and quantitydemanded increases from 1450 to 1550. Using these formulas for percentage change in priceand quantity are as follows- == [1450-1550/ 1450+1550] / [9-8/9+8]= [-100/3000] / [1/17]= [-0.033] / [0.14]= -0.23b.) price elasticity of demand from point A to B, price elasticity of coefficient is (0.81) whichmeans that demand is elastic. Same in the case of point B to C, that is (0.67) and C to D that is(0.23). Demand curve of price elasticity is always negative, therefore according to question, itfollows the law of demand that is as price increases quantity demanded decreases.TASK 2Market Structure#Perfect competitionMonopolisticcompetitionoligopolymonopolynumbers ofbuyersIn these types ofmarket, there must belarge number ofbuyers. Individualsof the market are notin a position whichinfluence price andoutput of industry(Gostkowski, 2018). For these types ofmarket, largenumber of firmsare there but notlarge as perfectcompetition.Firms are able tocut their priceoutput policy.In this type ofmarket, there isno precise upperlimit for entry ofnumber of firms.There are lot offirms whichinvolve indecision making.There are alsolarge numbers offirms in thismarket wherefirms sells closelyrelated productbutnothomogeneous.productsThis types of firmsAnother featurePrices of theEach firm in this2

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