Managerial Economics Assignment - Solved

Added on - Nov 2020

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MANAGERIALECONOMICS
Table of ContentsINTRODUCTION..........................................................................................................................1MAIN BODY...................................................................................................................................1SECTION A.................................................................................................................................1SECTION B.................................................................................................................................5CONCLUSION................................................................................................................................9REFERENCES.............................................................................................................................10
INTRODUCTIONManagerial economics refers to the economics functions in managing the functions of thefirms in the industry. Micro and macro economics are related with the firms in various ways andeffects the business environment in the economy.The report will include the features of perfect competition market, the point at which thefirm will stop hiring worker in a perfect competitive market form and the characteristics of themarket form. Also the government interventions to deal with market failures.Furthermore report will study the law of supply, the supply schedule and the variousfactors affecting the supply in the market. Also the effect of change in innovative technology onequilibrium price and equilibrium quantity supplied.Thereafter the report will include the case study of telecommunication regulatoryauthority which was a independent industry regulatory but later government opens the market formore private and foreign players. the type of market in the telecommunication industry , itscharacteristics, pricing policies of those firms and the profit maximization strategies intelecommunication industry.MAIN BODYSECTION A1.Perfect CompetitionAnswer:There are various types of market in the industry. Which comprise of monopoly,monopolistic competition and oligopoly market. Each market leads to different marketconditions on the bases of market demand, their cost and revenue functions. A perfectlycompetitive market is a market in which the competition between the firms is very high. Thereare large number of sellers and large number of buyers in this type of market. The commoditiesion this market are of similar nature. The customers demand for commodity can be fulfilled bylarge number of sellers in the market.For example: A person went to a vegetable seller and inquire the price of tomatoes. Thevegetable seller quotes the price of $ 5 per Kg. The person went to another vegetable sellers. Theother vegetable sellers also quoted the same price for tomatoes. Therefore from the aboveexample it is concluded that:1
There are many sellers and buyers in the vegetable market for the commodity tomatoes.All shopkeepers are selling tomatoes at same price that is $ 5 per Kg.The product in the market are homogeneous. The products in the perfect competitionmarket are similar and there is no major difference between the products sold in perfectcompetition market (Brickley and et.al., 2015).Features of Perfect Competition MarketLarge number of buyers and sellers:There are large number of sellers and buyers who are willing too purchase and sell goodsin the perfect competition market. The sellers in the perfect competition market are interrelated frthe determination of the price of the commodity to be sold to the customers.Homogeneous product:The products sold in the perfect competition are homogeneous. This means that productsare of similar nature and there is no major difference in the product consistency.Free entry and exit of firms:The sellers in this market are free from entry and exit in the market. The firms came tosell their products and services in the market and exit when they are not able to survive inmarket.Perfect knowledge of market:The buyers and sellers in the market posses complete knowledge of price of goods that isat what price they need to be sold. Also the buyers are aware of current price in the market. Thisresults in the homogeneous prices of products in market.Perfect Mobility of factors of Production and Goods:In this type of market there is easy flow of factors from one place to another where theycan be sold profitably. Also the market pertains where the highest price of those commodity canbe quoted by customers.Absence of Price Control:In this type of market the price of commodities are not determined by the sellers ratherthe price is determined by the market supply and demand forces in the market (Froeb and et. al.,2015).Perfect competition among Buyers and sellers:2
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