The Impact of Management Practices
Added on 2020-01-07
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STUDENTNAME: LABLU HUSSAINSTUDENT ID: 1303804MODULE TITLE: MANAGEMENT ECONOMICSModule Lecturer’s Name; Ravshonbek Otojanov1
TABLE OF CONTENTSPart A...........................................................................................................................................................................3Elasticity of Sales..........................................................................................................................................................3(b) Price elasticity of demand.....................................................................................................................................4(c) Income Elasticity.....................................................................................................................................................5(d)Revenue and Cost....................................................................................................................................................6(e) Profit maximisation and Cost minimisation............................................................................................................8(F) Intuitive Analysis...................................................................................................................................................10Part B.........................................................................................................................................................................10a. Brief history of the international company Microsoft............................................................................................10b. Discussion of the nature of the market structure of Microsoft..............................................................................11c. Nature of the market to which Microsoft belongs in the history...........................................................................13d. Discussion about the characteristic of the past market structure of Microsoft.....................................................14e. Degree of government intervention needed in present form of market of Microsoft...........................................16Reference List............................................................................................................................................................192
Part AElasticity of SalesPopulation Elasticity of sales can be defined as the responsiveness to sales due to change in population. In other words it means that due to increase or decrease in population to what extent and how sales is affected (Love,2013, p.125).Hereἐs= Elasticity of salesS= SalesP= PopulationdS= change in salesdP= change in populationAs given:ἐs= 0.8Therefore 0.8= (dS/ (140000-130000))(130000/S)0.8= (dS/10000)(130000/S)0.8= (dS / 1) (13/S)0.8/13= (dS/S)dS/S= 0.0615Therefore estimated percentage change in sales would be,⇒0.615100=6.1538%.Now if the population increases by 10000,The sale is expected to rise by:⇒(6.1538/100)100003
⇒615.384 units.(b) Price elasticity of demandPrice elasticity of demand is the responsiveness of price change on quantity or it can be written as change in quantity demanded due to 1 unit change in price.Here in this case P0– Initial Price Pf– Final PriceP0=7.50Pf = 8.50ἐp=0.85ἐp = (dq/q)/(dp/p)ἐp = dq/dpp/q⇒ἐp = dq/(Pf –P0)(7.50/q)⇒ἐp = dq/(8.50 –7.50)(7.50/q)⇒-0.85= dq/q7.50⇒dq/q=-(0.85/7.50)⇒dq/q= -0.113According to the problem it seems that with one unit increase in price the demand is expectedto fall by 0.113 units. In terms of percentage, with a percentage change in price,The demand is expected to fall by 0.113100 = 11.3% of the initial demand The rise or fall in revenue is dependent on the nature of the elasticity curve; if the curve iselastic the revenue is expected to fall with an increase in price, and if the demand curve is inelastic the total revenue is expected to increase with increase in price, because people havelittle choice then to move over to other goods. 4
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