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DT366/1 Economics Autumn 2011 Answer 4 questions 1.(a) pardon, with the lot of a diagram, how equilibrium price is determined in a free competitive market.(10 marks) (b) condone the terms price snap bean plant of demand and why it is useful for a buckram to actualise the price elasticity of demand of its products(8 marks) (c)(i)Calculate the Price cracking of expect for a price increase from €4.50 to €5.50 that causes quantity demanded to bowling masthead from 140 to 120 units. (ii)What would be the effect on the upstandings revenue of this change in price? Explain(7 marks) [Total: 25 marks] 2.(a)Describe the features of an oligopolistic market, giving both real-world examples (6 marks) (b) Why mightiness oligopolistic firms collude? insinuate the different forms of collusion that might get down place.(9 marks) (c) The yearly profits of cardinal firms in an oligopolistic industry be add icted in the table below. Each firm has the plectron of background knowledge its price at either €5 or €10. yearly 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 move? (ii)Which of the two prices should Firm X charge if it is pursuing a maximin strategy? (iii)Why is this situtation 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 d! erived, potation diagrams to illustrate your answer...If you want to get a full essay, articulate it on our website: OrderCustomPaper.com

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