Economic
Question 1
a. Explain the concept of Equilibrium Price in a perfectly Competitive Market and how it is determined?
b. Calculate the percentage change in equilibrium price if percentage change in quantity demanded is 25%. Price Elasticity of Demand is 1.35 and Price Elasticity of Supply is 1.15.
Question 2
Calculate the Total Variable Cost, Average Fixed Cost, Average Variable Cost, Average total Cost and Marginal Cost in the table given below (All Cost are given in USD).
|
Labor (No of workers) |
Output (Number of units) |
Total Fixed Cost |
Total Variable Cost |
Total Cost |
Average Fixed Cost |
Average Variable Cost |
Average total Cost |
MC |
|
0 |
0 |
150 |
0 |
|
|
|
|
|
|
1 |
1 |
150 |
100 |
|
|
|
|
|
|
2 |
5 |
150 |
|
|
|
|
|
25 |
|
3 |
8 |
150 |
|
|
|
37.5 |
|
|
|
4 |
10 |
150 |
|
|
|
|
55 |
|
|
5 |
11 |
150 |
|
650 |
|
|
|
|