Characteristics of the market structure

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Reference no: EM132612167

ASSIGNMENT

Question 1. You opened a restaurant. You rented a space, bought furniture, kitchen and food to prepare and also hired a chef and a waiter. But the demand is higher than expected and there is a crowd every day. Explain what can you do in the short run and what in the long run. Consider factors of production and law of diminishing marginal product to elaborate the answer in your own words.

Question 2. Find MC, FC and AC from the following table and explain the difference between fixed and variable cost and give an example.

Quantity of widgets	TVC	TC	TFC	MC	AC
0	0	10
1	1	11
2	3	13
3	6	16
4	10	20
5	15	25
6	21	31

Question 3. When the price of a good is $100, 200 units are supplied. But when the price increases to $150, 220 units are supplied. Calculate and state what type of elasticity is this. What can affect the elasticity of supply of one company? (Hint: Use the same formula that we used to find elasticity of demand.).

Question 4. Study the above figure and answer the following questions. (No need to copy graph to your answer sheet)
a. Which market structure is shown in the above graph? Justify your answer.
b. In which market structure companies can earn economic profit and why? Explain in detail using the characteristics of the market structure.

Reference no: EM132612167

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