Managerial Economics: OPEC Meeting, Demand Curve, Price Ceiling, Equilibrium Price, Perfect Competition

Managerial Economics

Contents
INTRODUCTION...........................................................................................................................4
Main Body.......................................................................................................................................4
1. Discussion on the OPEC meeting and its impact on demand and supply...............................4
2. Explain the changes in the demand curve because of the changes in the number of
entrepreneurs and customers........................................................................................................4
3. Explaining the impact of price ceiling on the price of heating gas in Europe.........................5
4. Explain the equilibrium price and new equilibrium price and quantity after deducting $15
million at every cost.....................................................................................................................6
5. Find out the Total Cost, Average Variable Cost, Average Total Cost, and Marginal Cost.. . .7
6. Characteristics of perfect competition.....................................................................................8
7. Critical evaluation of equilibrium point in perfect competition..............................................8
a.) Description of shutting down point when marginal revenue is less than the average cost.. . .8
b.) Explaining the situation of equilibrium in the perfect competition market...........................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Managerial economics is the study and application of economic concept and theories. This
report contains the decisions of the OPEC meeting which was conducted recently. It also
contains the study of the equilibrium price and quantity on the restaurants. Price celling is a
concept introduced by government to safeguard the suppliers. It is a measure to control the
prices. The concept of the same is also discussed in the report. There are several forms of
market structure but specifically perfect competition and its equilibrium is elaborated in the
report.
Main Body
1. Discussion on the OPEC meeting and its impact on demand and supply
Due to the global health pandemic, every sector suffered a lot of problems. There was a
major decline in the revenue and profits of the industries (Mardnly, Badran, and
Mouselli,2021). Organisation for petroleum exporting countries is responsible for the
management of crude oil and other petroleum products. When world was suffering from
the health crisis there were major downfall in the export of the sale of oil. Due to the
reduced turnover, organisation has to store its stock in large quantities which creates the
issue of stock piling and increases the storage cost of the oil. Covid-19 block the
transportation between the different countries and introduction of new oil fields off the
coast of Africa is being done. Therefore, there was no increase in the demand and price
also increased and there is positive relationship between supply and quantity demanded.
2. Explain the changes in the demand curve because of the changes in the number of
entrepreneurs and customers.
Demand Curve shows changes in the Quantity Demanded with the change in price of a
commodity. Increase in the prices of a commodity is causes decrease in the Quantity
Demanded and if the price of a commodity decreases then quantity demanded of the
product increases. Increase in the number of entrepreneur implies that the buyers will get
more options toc choose from the market (Baker, Kumar and Pandey, 2020). This increase
in the options for the buyers so does for the sellers, more the sellers in the market the price