Identify and distinguish the functions of price. (b). what is price legislation? (c). Explain the condition under which price legislation is employed in an economy. using diagrams, show the relevance of price elasticity of demand in business pricing strategies

Identify and distinguish the functions of price. (b). what is price legislation? (c). Explain the condition under which price legislation is employed in an economy. using diagrams, show the relevance of price elasticity of demand in business pricing strategies

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 15PAE

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*Question 1* (a). Identify and distinguish the functions of price. (b). what is price legislation? (c). Explain the condition under which price legislation is employed in an economy. using diagrams, show the relevance of price elasticity of demand in business pricing strategies *Question 2* (a). Prove that when the consumer is in equilibrium the marginal utility that is placed on the goods he/she consumes is equal to its price. (b). Explain how the consumer can restore equilibrium if market condition changes. (c). The demand function for a given type of product P=30-2Q find the point Price elasticity of demand when the price is 6 interpret your answer. *Question 3* (a). Explain the concept of economies and diseconomies of scale and briefly state their effects on the cost function. (b). Using the original analysis demonstrate how the abnormal demand curve is derived. (b). What is elasticity in economics? Briefly explain any two types of elasticity that are common in economic analysis.

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