Economics Assignment (Sample)
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Added on 2021-06-15
Economics Assignment (Sample)
Added on 2021-06-15
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Running Head: ECONOMICS ASSIGNMENTEconomics AssignmentName of the StudentName of the UniversityCourse ID
ECONOMICS ASSIGNMENT1Table of ContentsAnswer 1..........................................................................................................................................2Answer 2..........................................................................................................................................2Answer a......................................................................................................................................2Answer b......................................................................................................................................3Answer c......................................................................................................................................4Answer d......................................................................................................................................4Answer e......................................................................................................................................6Answer 3..........................................................................................................................................6Answer a......................................................................................................................................7Answer b......................................................................................................................................7Answer c......................................................................................................................................8Answer 4..........................................................................................................................................8Answer a......................................................................................................................................9Answer b....................................................................................................................................11Answer c....................................................................................................................................11Answer 5........................................................................................................................................12Answer a....................................................................................................................................12Answer b....................................................................................................................................12Answer c....................................................................................................................................12Answer d....................................................................................................................................13Answer 6........................................................................................................................................13Answer a....................................................................................................................................13Answer b....................................................................................................................................14Reference list.................................................................................................................................15
ECONOMICS ASSIGNMENT2Answer 1The share and stock market has characteristic similar to that of a perfectly competitivemarket. The stock market presents a global community consisting four different groups such aspublic corporation, buyers, sellers and market makers. The shares exchanged in the market arehomogenous. Buyers are able to purchase shares from any sellers and receive the same product.Like perfectly competitive market, sellers are price takers in the market. Share prices aredetermined independently without intervention of buyers and sellers (Taylor et al. 2014). Thebehavior of any individual in the market does not affect the market outcome. Buyers and sellershave complete information in the market. Having this basic assumptions, the BP shareholderrepresent a perfectly competitive market. Answer 2Answer aThe demand equation in the egg marketP=1000−2QThe supply function is given asP=100+QThe equilibrium price and quantity can be determined from equating market demand and marketsupply (Mankiw 2017)Demand=Supply¿,1000−2Q=100+Q
ECONOMICS ASSIGNMENT3¿,3Q=900¿,Q=300Putting equilibrium quantity in the market demand function, the equilibrium quantity can beobtained as P=1000−2Q¿1000−(2×300)¿1000−600¿400Equilibrium price = 400. Answer bProfit maximization level of output of a perfectly competitive firm is attained where price equalsmarginal cost. Given the marginal cost function of Victor’s egg firm as MC = 2q+1, firm’sequilibrium is obtained as P=MC¿,400=2q+1¿,399=2q¿,q=199.5Putting the value of q in the total cost function the total cost is determined as Totalcost(TC)=100+q2+q
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