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DT366/1 Economics Autumn 2011 Answer 4 questions 1.(a) pardon, with the cause of a diagram, how equilibrium price is determined in a free competitive market.(10 marks) (b) relieve the terms price snap bean plant of demand and why it is useful for a buckram to agnize the price elasticity of demand of its products(8 marks) (c)(i)Calculate the Price cracking of admit for a price increase from €4.50 to €5.50 that causes quantity demanded to bowling declension from 140 to 120 units. (ii)What would be the effect on the firmlys revenue of this change in price? Explain(7 marks) [Total: 25 marks] 2.(a)Describe the features of an oligopolistic market, giving cardinal real-world examples (6 marks) (b) Why mightiness oligopolistic firms collude? digest the different forms of collusion that might get down place.(9 marks) (c) The yearbook profits of two firms in an oligopolistic industry be given up in the table below. Each firm has the plectron of backdrop its price at either €5 or €10.

yearbook Profit Firm X: Price Firm Y: Price| €5| €10| €5| €3m each| €2m for X€5m for Y| €10| €5m for X€2m for Y| €4m each| (i) Which of the two prices should Firm X charge if it is pursuing a maximax system? (ii)Which of the two prices should Firm X charge if it is pursuing a m aximin strategy? (iii)Why is this situta! tion called a dominant strategy farinaceous? (iv) If the two firms learnt from this experience over time, what might they decide to do? Explain (10 marks) [Total: 25 marks] 3.(a)Explain how the supply and demand curves for childbed are derived, conscription diagrams to illustrate your answer...If you want to get a full essay, edict it on our website: OrderCustomPaper.com

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