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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)
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#241852 on Oct 2019
#241852 on Oct 2019 
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