Exam (elaborations)
ECS 1501 ASSIGNMENT 10 2023 SOLUTIONS
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Firefox https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=11133234&cmid=604697Started on Sunday, 4 June 2023, 5:52 PM
State Finished
Completed on Sunday, 4 June 2023, 6:51 PM
Time taken 59 mins 47 secs
Marks 20.00/20.00
Grade 100.00 out of 100.00
Question 1
Complete
I confirm
Not graded
that this assessment will be my own individual work;
that I will not communicate with anyone else in any way during the completion of this assessment;
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
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Question 2
Complete
Use the diagram below which shows the short-run conditions of a firm in a perfectly competitive market to answer
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the question.
1.00
The firm is making _______.
an economic profit of R21 750.
an economic loss of R83 375.
a normal loss of R21 750.
an economic profit of R105 125.
To determine economic profit or loss, or normal profit in the short run of a perfectly competitive firm, you need to
compare P with AC. If P > AC, firms will make an economic profit; if P < AC, firms will make an economic loss and,
where P = AC, firms make a normal profit in the short run.
In the diagram, P > AC or R145 > R115 = economic profit of R30 per unit.
To determine the total economic profit, the profit-maximisation output, must be multiplied by the economic profit
per unit: R30 x 725 units = R21 750.
,Firefox https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=11133234&cmid=604697
Question 3
Complete
If a firm in a perfectly competitive industry raises its price above the market price _____.
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all other firms in the industry will follow.
sales will rise slightly.
sales will drop to zero.
sales will stay the same.
A firm in a perfectly competitive market, is faced by a horizontal demand curve, which implies that firms can sell any
quantity at the given market price. If a firm raises its price above the market price, sales will drop to zero, because
consumers can buy any quantity at the given (lower) market price.
,Firefox https://mymodules.dtls.unisa.ac.za/mod/quiz/review.php?attempt=11133234&cmid=604697
Question 4
Complete
Economists assume that the goal of the firm is to
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break-even in the long run.
minimise implicit costs.
maximise total revenue.
maximise profits.
Economists assume that the goal of the firm is to maximise profits.
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