1. Combination of features from both perfect competition and monopoly; this compromise between monopoly and perfect competition takes the form of many firms producing differentiated and highly substitutable products – product differentiation could be in terms of packaging designs, colour, brand names, advertising claims, after sale service, all being competitive and highly persuasive. Examples of such market structures could be seen in the Edible oil industry where we have EAI producing Kimbo, Kapa Oil Refineries (Kasuku), Bidco (Chipsy)
2. Freedom of entry and exit.
3. Downward sloping demand curve – denoting presence of competition.
4. Possibility of super-normal profits in the short run.
5. Normal profits in the long-run with excess capacity
6. Wider scope of choice to the consumer through product differentiation; the highly competitive business environment allows for improvement in the quality of products at relatively lower prices
Wilfykil answered the question on February 7, 2019 at 09:02
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Using a well labeled diagram, show and explain why in a perfectly competitive market structure, when the marginal revenue equals marginal cost, this is only...
(Solved)
Using a well labeled diagram, show and explain why in a perfectly competitive market structure, when the marginal revenue equals marginal cost, this is only a necessary but not sufficient condition for profit maximization.
Date posted:
February 7, 2019
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Answers (1)
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Under what circumstances might it be possible and profitable for a monopolist to charge different prices for his product in different markets?
(Solved)
Under what circumstances might it be possible and profitable for a monopolist to charge different prices for his product in different markets?
Date posted:
February 7, 2019
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Answers (1)
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The table below represents estimated national income values for hypothetical economy X in millions of shillings:
Gross National Product (at market prices) = 389.2
Depreciation allowance =...
(Solved)
The table below represents estimated national income values for hypothetical economy X in millions of shillings:
Gross National Product (at market prices) = 389.2
Depreciation allowance = 47.0
Indirect taxes less subsidies = 42.4
Business taxes = 11.4
Personal income taxes = 66.3
Government transfers = 59.3
Retained profits = 13.0
Based on the information provided, calculate the Net National Product at market price, the Net National Income (at factor cost), Personal Income and the disposable income for this economy
Date posted:
February 7, 2019
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Answers (1)
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Distinguish between Gross National and Gross Domestic products and account for the lower values of the former in developing economies.
(Solved)
Distinguish between Gross National and Gross Domestic products and account for the lower values of the former in developing economies.
Date posted:
February 7, 2019
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Answers (1)
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Given the following data in millions of shillings pertaining to an economy, determine Net National and
Gross National Product Values.
National income: 3,387
Indirect...
(Solved)
Given the following data in millions of shillings pertaining to an economy, determine Net National and
Gross National Product Values.
National income: 3,387
Indirect business taxes (less subsidies): 366
Depreciation: 455
Date posted:
February 7, 2019
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Answers (1)
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Suggest economic measures to curb inflation
(Solved)
Suggest economic measures to curb inflation
Date posted:
February 7, 2019
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Answers (1)
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what is the effect of high and rising inflationary rate on the rate of interest?
(Solved)
what is the effect of high and rising inflationary rate on the rate of interest?
Date posted:
February 7, 2019
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Answers (1)
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Define the term hyperinflation.
(Solved)
Define the term hyperinflation.
Date posted:
February 7, 2019
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Answers (1)
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What are the determinants of demand for labor?
(Solved)
What are the determinants of demand for labor?
Date posted:
February 7, 2019
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Answers (1)
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By use of diagrams, illustrate and explain the resultant changes on the equilibrium price and quantity from a simultaneous fall in price of a substitute...
(Solved)
By use of diagrams, illustrate and explain the resultant changes on the equilibrium price and quantity from a simultaneous fall in price of a substitute and an increase in the cost of raw materials for a specific commodity.
Date posted:
February 7, 2019
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Answers (1)
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Bring out the salient features of a monopoly market model.
(Solved)
Bring out the salient features of a monopoly market model.
Date posted:
February 7, 2019
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Answers (1)
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A monopolistic firm with a linear demand curve finds that it can sell two units at Sh.12 or twelve units at Sh.2. Its fixed cost...
(Solved)
A monopolistic firm with a linear demand curve finds that it can sell two units at Sh.12 or twelve units at Sh.2. Its fixed cost is Sh. 20 and its marginal cost is constant at Sh. 3 per unit. Derive and plot the following:
Marginal cost, average total cost, marginal revenue and demand curves for this firm.
Date posted:
February 7, 2019
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Answers (1)
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Illustrate and explain the three stages associated with the law of variable proportions
(Solved)
Illustrate and explain the three stages associated with the law of variable proportions
Date posted:
February 7, 2019
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Answers (1)
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Argue for and against international trade restrictions.
(Solved)
Argue for and against international trade restrictions.
Date posted:
February 7, 2019
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Answers (1)
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Distinguish between a tariff and a quota as applied in International Trade.
(Solved)
Distinguish between a tariff and a quota as applied in International Trade.
Date posted:
February 7, 2019
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Answers (1)
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Under what conditions is price discrimination possible?
(Solved)
Under what conditions is price discrimination possible?
Date posted:
February 7, 2019
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Answers (1)
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You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
How much profit would the firm earn if it sold the output at a single price, and if it discriminates?
Date posted:
February 7, 2019
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Answers (1)
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You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
What price must be charged in each market in order to maximize profits?
Date posted:
February 7, 2019
.
Answers (1)
-
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits....
(Solved)
You have been hired as a consultant by a firm producing bread to advise on a pricing strategy that would
enable the firm to maximize profits. This firm is a monopolist which sells in two distinct markets, one of
which is completely sealed off from the other.
As part of the analysis, you establish that the total demand for the firm‟s output is given by the
following equation:
Q = 50 – 0.5P
and the demand for the firm‟s output in the two markets is given by the following equations:
Q1 = 32 – 0.4P1 and
Q2 = 18 – 0.1 P2
Where: Q = total output
P = Price
Q1 = Output sold in Market 1
Q2 = Output sold in Market 2
P1 = Price charged in Market 1
P2 = Price charged in Market 2
The cost of production is given by C = 50 + 40Q
Where C = total cost of producing bread.
Determine the total output that the firm must produce in order to maximize profits.
Date posted:
February 7, 2019
.
Answers (1)
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Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
...
(Solved)
Given a hypothetical consumption function of the form:
C = a + bYd
Where Yd = Y – T
And Y = Income
T = Taxes and that:
Government spending and investment are exogenously determined at G and I respectively: Determine Government Spending
Multiplier.
Date posted:
February 7, 2019
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Answers (1)