Microeconomics Assignment: Price Elasticity, and Market Analysis

This economics assignment delves into several key microeconomic concepts. The first question examines price discrimination in a monopoly, calculating producer and consumer surplus, and analyzing the effects of price discrimination on market outcomes. Question 2 explores price elasticity of demand and its implications for taxation, determining the appropriate tax rates for goods with varying elasticities. Question 3 focuses on marginal analysis, evaluating the decision to produce additional units based on marginal cost and revenue, and identifying sunk costs. Question 4 analyzes the impact of changes in technology, specifically fracking, on the coal market and electricity generation. Question 5 uses game theory to analyze strategic decisions of firms regarding advertising. Finally, questions 6 and 7 discuss short-run and long-run profitability and the problem of asymmetric information in the insurance market, respectively, including moral hazard and adverse selection, and how insurance companies mitigate these issues.