Answer to Question #71630 in Microeconomics for CHARLES ADONGO
Question #71630
Suppose the product ploduced and sold lsi:k.; Alia Company Limited has a price elasticity of
demand 9.170.7_ If the Manager wants to increase total revenue, what must be done to the price
of the product? Explain_ (8 Marks)
(b) Clearly distinizaish between. increasing and decreastri. g returns to scale. (6 Marks)
• Explain the difference between producer surplus and consumer surplus_ (6 Marks)
Ql_ Suppose the demand and supply functions for Sowbolobo are stated a fonovvs:
QL:1— 128 +9P = 0 and 4:25 + .-7P=O
=
Where Os quantity demanded Os is quantit-i,' supplied and p is price.
(a) Calculate the equilibrium price and quantity for the product_ (S Marks)
(b) Assume. a tax of GH 05 is imposed on the product: what will. be the new equilibrium price and
quantity? (6 Marks)
(o) How much tax. revenue is the government doing to receive from the sale of
scrxbolobo? (6 Ma rks)
demand 9.170.7_ If the Manager wants to increase total revenue, what must be done to the price
of the product? Explain_ (8 Marks)
(b) Clearly distinizaish between. increasing and decreastri. g returns to scale. (6 Marks)
• Explain the difference between producer surplus and consumer surplus_ (6 Marks)
Ql_ Suppose the demand and supply functions for Sowbolobo are stated a fonovvs:
QL:1— 128 +9P = 0 and 4:25 + .-7P=O
=
Where Os quantity demanded Os is quantit-i,' supplied and p is price.
(a) Calculate the equilibrium price and quantity for the product_ (S Marks)
(b) Assume. a tax of GH 05 is imposed on the product: what will. be the new equilibrium price and
quantity? (6 Marks)
(o) How much tax. revenue is the government doing to receive from the sale of
scrxbolobo? (6 Ma rks)
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