The long average cost of production of a firm is observed to be falling. What factors are responsible?
How useful is the concept of elasticity of demand to the government and businesses?(give appropriate examples)
If you are a firm, in which of the following market(s) would you cahrge a high price, given the respective price elasticity of demand in these markets:
(1) bombay market (ED=1.2) (ii) Big market(Ed=0.6) (III) Kroo town market (Ed=0.2) (iv) Dove court (Ed=1.8)
Answer:
im not going to spoonfeed you, but neither am i going to give answers like those above, so get whatever you can here, and go read up the details.
Q: Under what circumstance would the long run average cost be rising as output increases?
Ans: when diseconomics of scales sets in. (go read up economics of scales)
Q: How useful is the concept of elasticity of demand to the government and businesses?(give appropriate examples)
Ans: go read up on 1) how elasticity on supplier or consumers side affects tax burden, that is for government when deciding on setting tax.
as for business, explain how it would affect the price setting of companies, and the different types of market structures(perfect competition, oligopoly, etc) and go find the examples on your own.
Q : If you are a firm, in which of the following market(s) would you cahrge a high price, given the respective price elasticity of demand in these markets:
Ans : elasticity of demand and supply affects how firms set the price. again, i doubt anyone will spoonfeed you for your benefit.
If your fixed costs or labour are increasing
I agree with you. Its all in the economics.
Wages
Transport Cost / Fuel Costs
etc.
sounds like you are doing an Economic Degree, good luck!
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