(solved) Assignment on Economics Report

   

Added on  2020-07-23

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ECONOMICS
(solved) Assignment on Economics Report_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1Explaining in detail the effect of tax imposed on sellers of tobacco..........................................1QUESTION 2...................................................................................................................................2(a) Calculating ATC, AFC, AVC and MC..................................................................................2(b) Explaining the difference between monopolistic and oligopolistic markets with examples.4QUESTION 3...................................................................................................................................5Explaining the economic rationale for the policy of merging of Local and State governmentsin Australia using cost curves.....................................................................................................5CONCLUSION................................................................................................................................6REFERENCES................................................................................................................................7
(solved) Assignment on Economics Report_2
INTRODUCTIONIn this report we would be calculating some fundamentals of economics like that of Totalcost and average cost of a firm. This would also be including the part of rate of excise on thetobacco products especially like that of cigarettes in Australia as their government has decided toincrease the excise duty on tobacco at 12.5% each year from 2018-2020. The report would alsobe covering certain parts of economic rational for the merger of local and state governments inAustralia.QUESTION 1Explaining in detail the effect of tax imposed on sellers of tobacco.As the tax rate or the excise duty on tobacco in Australia is been increasing by 12.5%each year from 2018-2020 so there are chances that this would be up to 69% of the total price ofthe pack of cigarettes. This increase is done in the month of September of each year based on theaverage weekly ordinary time earning (AWOTE) this was schedule in the Excise tariff act of1921. As per the common fundamentals of economics it was seen that the price and demand ofthe products are having inverse relationship between them both. As the price increases demandof that products decrease and vice verse but this is not in the case of tobacco or cigarettes whichconsumer are consuming.The price elasticity of demand would be regarded to as the extent to which demand ofproducts would be decreasing or increasing if the price of that product is increased or decreasedby the producer (Wright, Smith & Hellowell, 2017). If there is slight change in the price ofproduct than this would be leading to high or change in demand of that products. But in case oftobacco and its products they are regarded not to as elastic there is very little or no change in thedemand of that product if their price is rising. However, if there is high change in the price ofthat product than the number of people smoking would be reduced which is increase in theirinterest in smoking or quitting it successfully.The increase on the excise duty would be mainly on the seller or producer who issupposed to pay the tax on direct bases but the burden of this tax would be drawn directly on thebuyer or actual consumer. As they are the one who is paying the amount or price of cigarettes sothe burden of tax would be laying onto them only which is paid by seller (Morgan, 2017).1
(solved) Assignment on Economics Report_3

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