Overview
Instructions:
- This assignment covers 30 percent of the grade structure.
- Answer ALL QUESTIONS.
- The assignment is an individual assignment, and you should submit it within TW0 WEEK in LMS system.
QUESTION 1
Managerial economics differ from economics. Managerial economics focus the use of economic theories and principles to make decisions regarding the allocation of scarce resources.
- Explain managerial economics. (6 MARKS)
- Explain the comparison between managerial economics and economics. (10 MARKS)
- Explain the scope of managerial economics. (14 MARKS)
QUESTION 2
In economics, assuming all else is equal and that demand remains constant, any change in the determinants of supply—such as climate changes, taxes, technological advancements, wars and subsidies—will result in a shift of the supply curve either to the left or to the right. Justify how each factors determine the supply. (10 MARKS)
QUESTION 3
By implementing best operational practices, it allows business to prevent cost overrun and gain a competitive advantage, thus it benefits to a company or business. Justify the benefits of cost efficiency in business operation. (10 MARKS)
QUESTION 4
Economies of scale are an important concept for any business in any industry and represent the cost-savings and competitive advantages of a business. A business should achieve economies of scale.
- Justify economies of scale is a part of a discussion of profit maximization. (5 MARKS)
- Justify a company can achieve economies of scale. (5 MARKS)
- Explain economies of scale and show it in a graph. (5 MARKS)
- Explain diseconomies of scale and show it in a graph. (5 MARKS)
QUESTION 5
Market structure is relevant to be discussed in the context of managerial economics as market structure is the set of features of a market that determine the way firms compete and make pricing and output decisions.
- Explain market structure.(2 MARKS)
- Evaluate the relationship between market structure and competition. (2 MARKS)
- Evaluate the relationship between market structure and consumer behavior. Provide your answer with graphical description to describe the relationship. (6 MARKS)
- The Table shows total revenue and total cost of a monopoly firm.
| Quantity (Q) | Price (P) | Total Revenue (TR) | Total Cost (TC) |
| 1 | 1,200 | 1,200 | 500 |
| 2 | 1,100 | 2,200 | 750 |
| 3 | 1,000 | 3,000 | 1,000 |
| 4 | 900 | 3,600 | 1,250 |
| 5 | 800 | 4,000 | 1,650 |
| 6 | 700 | 4,200 | 2,500 |
| 7 | 600 | 4,200 | 4,000 |
| 8 | 500 | 4,000 | 6,400 |
You require to
- Calculate the marginal cost and marginal revenue for the quantity produced.
- Show in a graph, maximum possible profit from the situation. (10 MARKS)
- In a monopoly market structure, justify why marginal revenue is negative after getting a maximum profit. (6 MARKS)
(4 MARKS)