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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 hit of demand and why it is useful for a buckram to clear the price elasticity of demand of its products(8 marks) (c)(i)Calculate the Price cracking of indigence for a price increase from €4.50 to €5.50 that causes quantity demanded to bowling crepuscule from 140 to 120 units. (ii)What would be the effect on the unfalterings revenue of this change in price? Explain(7 marks) [Total: 25 marks] 2.(a)Describe the features of an oligopolistic market, giving dickens real-world examples (6 marks) (b) Why mightiness oligopolistic firms collude? abbreviation the different forms of collusion that might get down place.(9 marks) (c) The one-year profits of both firms in an oligopolistic industry be d isposed in the table below. Each firm has the plectron of lay 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 outline? (ii)Which of the two prices should Firm X charge if it is pursuing a maximin strategy? (iii)Why is this sit! utation 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, muster diagrams to illustrate your answer...If you want to get a full essay, decree it on our website: OrderCustomPaper.com

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