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ECS1501 ASSIGNMENT 9 SEMESTER 2 2024 DUE DATE 07 OCTOBER 2024
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UNISA 2024 ECS1501-24-Y Assessments Assessment 9QUIZ
Started on Thursday, 3 October 2024, 11:03 AM
State Finished
Completed on Thursday, 3 October 2024, 11:13 AM
Time taken 9 mins 51 secs
Marks 10.00/11.00
Grade 90.91 out of 100.00
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 assessment;
that I will not cheat in any way in completing and submitting this assessment.
I confirm.
I do not confirm.
,Question 2
A perfectly competitive market is described as a market with
Complete
Mark 1.00 out of a few firms producing differentiated goods.
1.00
a large number of firms that each individually sets the price of their goods.
a few buyers, many sellers and the production of differentiated goods.
many buyers, many sellers and the production of homogenous goods.
In a perfectly competitive market, there are many buyers and sellers, all of whom are small relative to
the size of the market. This market structure is characterised by several key features:
1. Many Buyers and Sellers: There are numerous buyers and sellers in the market, and no single
buyer or seller has the power to influence the market price. Each buyer and seller is a price
taker, meaning they accept the market price as given and cannot change it.
2. Homogeneous Products: The products or services sold in a perfectly competitive market are
homogeneous (meaning they are identical and indistinguishable from one another).
3. Perfect Information: All buyers and sellers in a perfectly competitive market have access to
perfect information. T
4. Free Entry and Exit: There are no barriers to entry or exit in the market.
5. Firms are Price Takers: Each firm in a perfectly competitive market is so small compared to the
overall market that its actions cannot affect the market price. Therefore, each firm accepts the
market price as given and adjusts its quantity of output to maximise profits at that price.
6. Profit Maximisation: Firms in a perfectly competitive market aim to maximise profits.
7. No government intervention: The market answers the questions What? How? and For whom
Question 3 Economists assume that the goal of the firm is to
Complete
Mark 1.00 out of break-even in the long run.
1.00
maximise total revenue.
maximise profits.
minimise implicit costs.
Economists generally assume that the goal of the firm is to maximise its profits. Profit maximisation
occurs when a firm produces a quantity of goods or services at which its marginal cost (the cost of
producing an additional unit) equals its marginal revenue (the revenue earned from selling an
additional unit).
While profit maximisation is a common assumption in economic theory, real-world firms often have
various objectives and goals, including market share growth, customer satisfaction, social
responsibility, or long-term sustainability.
,Question 4
The figure below shows the price, marginal cost and average cost curves facing a perfectly
Complete competitive firm.
Mark 1.00 out of
1.00
What is the total daily revenue of the profit-maximising firm?
R2 000
R720
R800
R960
At a price of R20, the firm will produce 100 units.
The total daily revenue of the profit-maximising firm is
TR = P X Q
= R20 x 100
= R2 000
, Question 5
Use the diagram below which shows the short-run conditions of a firm in a perfectly competitive
Complete market to answer the question.
Mark 1.00 out of
1.00
The firm is making _______.
an economic profit of R21 750.
an economic profit of R105 125.
a normal loss of R21 750.
an economic loss of R83 375.
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.
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