Started on Friday, 27 September 2024, 1:39 PM
State Finished
Completed on Friday, 27 September 2024, 1:52 PM
Time taken 13 mins 5 secs OSCAR THE TUTOR
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Grade 77.27 out of 100.00 for FAC MAC ECS DSC TAX QMI FIN INV BNU STA
tutorials
Question 1 I confirm
Complete that this assessment will be my own individual work;
Not graded
that I will not communicate with anyone else in any way during the completion of this
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question
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
Question 2 A monopoly is a
Complete
Mark 1.00 out single buyer of raw materials.
of 1.00
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large number of producers each with a small share of the total market output.
question
single seller of a product that has no close substitutes.
small group of producers with similar products.
A monopoly is a market structure in which a single seller or producer controls the entire
supply of a product or service, and as a result, dominates the market and has significant
pricing power.
Key characteristics of a monopoly include:
1. Single Seller: There is only one company or entity that provides the product or
service in the market.
2. No Close Substitutes: The product or service offered by the monopoly has no
close substitutes. Consumers do not have alternative options that are comparable
in terms of quality, price, or availability.
3. Price Maker: The monopoly has control over setting the price of the product or
service.
4. Barriers to Entry: Monopolies often maintain their dominant position due to
significant barriers that prevent other firms from entering the market and
competing. Barriers can include legal restrictions, high startup costs, control over
essential resources, or technological advantages.
,Question 3 What will happen if a shoe firm sells its shoes at a price lower than the opportunity cost
Complete of the inputs used in the production process?
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The firm will possibly make an accounting profit but will make an economic loss.
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question The firm will make both accounting and economic losses.
The firm will make both accounting and economic profits.
The firm will possibly make an economic profit and an accounting loss.
Let’s use some numbers to understand this point.
Economic profit = TR - TC = TR – (EXPLICIT COST + IMPLICIT COST (OPPORTUNITY
COST)]
Accounting profit = TR - TC = TR – (EXPLICIT COST)
If for example the TR= R100 (price is R10 and quantity sold is 10 units), EXPLICIT COST =
R50 AND IMPLICIT COST = R80
Then the economic profit/loss = 100 – (50 + 80) = -30
The accounting profit/loss is = 100 – (50) = 50
Thus it is possible to make an accounting profit but the firm WILL make an economic
loss.
Question 4 Use the diagram below which diagram shows the short-run conditions of a firm in a
Complete perfectly competitive market to answer the question.
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question
In the long run, ____ firms will ____ the industry so that the market supply curve shifts to
the _____, until prices ______ sufficiently so that all firms make a normal profit only.
, Firms are making economic profits. This will encourage new firms to enter the market,
leading to an increase in supply shown by a rightward shift of the supply curve. The
market price will decrease until normal profits are made. There will thus be no incentive
or inducement for new firms to enter the industry or to leave the industry in the long run,
as all firms in the industry will only make normal profits.
Question 5 The figure below shows the price, marginal cost and average cost curves facing a
Complete perfectly competitive firm.
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question
What is the firm's profit-maximising daily output?
80 units
100 units
60 units
No output will be produced
The firm maximises profit by producing where MR (or P) = MC.
, From the diagram, we see that P = 20 and to find the output level we have to pinpoint the
spot where the price line (the AR or MR curve) intercepts the MC curve, and then read off
the corresponding value on the output (horizontal) axis, as output = 100.
Question 6 Look at the figure below and then indicate whether the statement is True (T) or False (F):
Complete
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question
The firm will produce at a price of R10.
Note, that you will lose 50% of the mark for this question if you choose the incorrect
option.
If you are not sure about the answer and do not want to guess, choose the “Unsure”
option. You will neither receive marks for the question nor will you lose marks for
choosing this option.
True
False
Unsure
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