Answer all the Questions. (Word Limit 1500-2000 words) Question 1 A firm produces laptops at the following levels of production: Workers Total Product Marginal Product Average Product 0 0 - 1 20 - - 2 45 - - 3 75 - - 4 100 - - 5 120 - - 6 135 - - - a) Complete the table with MP and AP calculations. b) At what number of workers does diminishing returns begin? c) Explain what happens to marginal and average product in this case. (15 Marks)
Question 2 For each scenario, calculate the elasticity and explain its type: a) When the price rises from $150 to $180, the quantity demanded falls from 80 to 64 units. b) As the price declines from $40 to $36, the quantity supplied decreases from 500 to 450 units. c) When the price of product A increases from $15 to $18, the quantity demanded of product B rises from 60 to 72 units. d) If the price of product X drops from $20 to $16, the quantity demanded of product Y decreases from 50 to 43 units. (15 Marks)
Question 3 A perfectly competitive firm faces the following cost and revenue structure. The market price is $400 per unit. Quantity Total Cost Total Revenue Profit 0 250 0 1 450 - 400 2 650 - 800 3 850 - 1200 4 1250 - 1600 5 1850 - 2000 6 2650 - 2400 a) Complete the profit column. - b) What is the profit-maximizing quantity and why? c) Given this profit level, what will happen in the long run? Explain the process and the final equilibrium. (15 Marks)
Question 4 The table below shows the supply and demand for solar panels per month: Price per unit Monthly Supply Monthly Demand $400 150 350 $500 200 300 $600 250 250 $700 300 200 $800 350 150 $900 400 100 a) What is the equilibrium price and quantity in this market? Explain your reasoning. b) Suppose a new government subsidy increases supply by 100 units at every price point. Calculate the new equilibrium price and quantity and explain why the direction of the price change makes intuitive sense. (10 Marks)
Question 5 Using real-world examples from 2025, analyze the impact of dynamic pricing in the ride sharing industry: a) Explain how dynamic pricing adjusts to supply and demand, with specific examples of pricing changes during peak hours in major cities in 2025. b) Discuss the economic rationale behind its use and its effects on consumer and producer surplus. Support your analysis with specific data and examples. (15 Marks, maximum 400 words, minimum 5 academic/journalistic references)
Questions
- a) Explain the concept of price discrimination and its application in online retail, with specific examples from 2025.
- b) Analyze the short-term impacts on market efficiency and consumer welfare in affected markets.
- c) Discuss potential long-term outcomes based on historical pricing trends in similar markets. Support your analysis with specific data and examples. Include introduction and conclusion. (20 Marks, maximum 600 words, minimum 5 academic/journalistic references)
PLAGIARISM Plagiarism is defined as providing material from an uncredited source, or without the acknowledgement of the original author. For longer submissions and reports, students are required to provide an Assignment Cover Sheet, which states that submission is their original work, and has not been submitted for another assignment, either in that course, or another Plagiarism may have many forms including but not limited to: ▪ Outright copying another author’s work without acknowledgement ▪ Cut and paste without the correct citation and acknowledgement. ▪ Copying key words but changing the sentence structure without crediting the original source ▪ Copying the sentence structure but changing some words without crediting the original source ▪ Following the structure or organization of another author’s work, or order of presentation of ideas ▪ Submitting work that was created by an unacknowledged third party (i.e., writing service, or another student) ▪ Copying from published authorities without acknowledgement ▪ Failure to correctly use quotation marks when expressing another author’s idea ▪ Incorrect or improper use of in-text citation and referencing ▪ Missing or incorrectly presented bibliography or reference list ▪ Pretending ownership of another author’s ideas ▪ Making work available to another person for copying ▪ Falsifying results ➢ The plagiarism tolerance for MBA is 8 %. ➢ In cases where the plagiarism percentage exceeds the tolerance, students are given a second chance to rework on their assignments and submit. However, if the percentage continues to exceed the tolerance percentage the student will be awarded one grade