MBA Programme

Econ 651: Managerial Economics Group Homework Assignment March 2012 (Cohort 3, Al Ain)
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Homework 1
Prepared By: Fakhreldin Eltayeb Ibrahim Omer Khaled Al Hakeem Mariam Rashash Prepared for: Dr. Marina Selini 201180932

Chapter 1: Technical Question Q1

Perfect Competition: There are a large number of firms producing all most the same products or services, and have a competitive prices. The new firms can easily enter this market. Monopolistic Competition: there are large number of firms producing different products and services selling it in different price until they loss the market power. The new firms can easy enter this market. Oligopoly: there are few mutual companies producing similar high products competing with each other. The new firms could face significant barriers. Monopoly: One firm producing a good or services with no substitutes and other firms will face difficulties to enter the same market. The demand will go with the price offered by this firm for their products.

Application Question Q3 A. Monopoly: China still can sell the soybean in any price they want especially after the unexpected cut harvest. U.S. farmers will respond for the high price. B. Oligopoly: the competition is between big privet sector companies which are GM, Ford & DaimlerChrysler where each company is giving the customer different offer to sell their products (cars). GM is trying to develop their own competitive strategy to sell their cars and the other companies are coping them in different way. C.: Monopolistic Competition: D. Perfect Competition: there are many restaurants in US, but the Chinese cooking is the popular food in US because they are using special chefs and using special stove with high heat for the cooking. also they have more location than other famous restaurants in US

Chapter 2: Technical Question Q1 A. The increase in the salary will make the demand increase. It will shift to the right. B. The increase in the price will make the demand reduce. The quantity will decrease. C. D. E. The price will decrease on Dec. so the demand on October will be less. It will shift left

Q3 A. Normal B. X and Z are contradictious in demand. We know this because there is a negative relationship between the price if the goods Z and the demand of the goods X (thus as price of Z increase the demand will decrease X) C. D. QD= 500- 5Px +0.5(30,000) +10(10) -2(20) = 500- 5Px +15,000 +100 40 = 15,560 + 5Px E.

15

D0 15,560 15,635

D1

F. QD =15,560 + 5Px QD =15,560 + 5(15)= 15,635 G.

Application Question Q5

Chapter 3: Technical Question Q1 A. 1 Unit or unitary elastic B. 5.4 Elastic demand C. 0.53 Inelastic demand

Q3 A. Elastic Demand B. Inelastic Demand C. Unitary Elastic D. Elastic Demand

Application Question Q5

Chapter 5 Technical Question

Q5

Analytical Question Q3