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Economics for Decision Making: Assignment

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Added on  2021-06-17

Economics for Decision Making: Assignment

   Added on 2021-06-17

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Page 1 of 10ECONOMICS FOR DECISION MAKERS
Economics for Decision Making: Assignment_1
Page 2 of 10Table of contentsQuestion 1..................................................................................................................................3Question 2..................................................................................................................................3Question 3..................................................................................................................................4Question 4..................................................................................................................................5Question 5..................................................................................................................................8Question 6..................................................................................................................................8Reference..................................................................................................................................10
Economics for Decision Making: Assignment_2
Page 3 of 10Question 1 The shareholders of BP also represent a structure which is same as that of perfectcompetition. This is due to the fact that, the share market has a structure similar to that of amarket structure of perfect competition. One of the main assumptions of the perfectcompetition is that there are a huge number of buyers and sellers in the market. Likewise, thenumber of potential shareholders and the companies which are selling the share is also veryhuge. McKenzie and Lee (2016) stated that one of the unique features of perfect competition,that is absent from the other market structure is the lack of power to the buyers and the sellersto control the price. The shareholders and the company management of BP both do not haveany control over the prices of the share. The share prices of BP depend on the interaction ofthe shared demand and the share supply in the market just like the case of perfectcompetition. Another similarity that exists in the share market is the free entry exits whichallow any of the company to offer their company to stake to the potential shareholders whocan choose to sell and exit the market anytime they wish.Question 2a) The demand is P= 1000-2Q and the supply of the market is P=100+QNow the market is in equilibrium when the supply is equal to the demand1000-2Q= 100+Q=>3Q= 900 => Q=300Now put the value of Q in the demand equation,P=1000-2*(300) = 400Therefore the equilibrium quantity is 300 egg cartons and the price is 400 units. b) The profit maximisation condition for the perfect competition is P=MCAnswer from the part (a) is that P= 400=> 400= 2q+1
Economics for Decision Making: Assignment_3

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