ALGONQUIN COLLEGE | Online Assignment #3 This assignment relates to the following Course Learning Requirements: CLR2: Analyze how competitive markets allocate resources CLR3: Analyze the effects of government intervention in the marketplace. CLR4: Analyze the theory of firm behaviour to explain the operation of producers Objective of Assignment: The objective of this assignment is to assess your understanding of the price elasticity of demand and the price elasticity of supply, to calculate each, and to apply these concepts to real world-scenarios. In addition to the above, this assessment will determine your ability to calculate and interpret various costs of production, analyze and illustrate a monopoly firm to explain its behaviour, analyze and illustrate a competitive firm to explain its production behaviour, evaluate and illustrate the impact of price controls in the marketplace. Analyze and illustrate the impact of taxes in the economic marketplace. Pre-Assignment Instructions: Complete up-to and including module 10, including assigned readings and work. Assignment Tasks: 1. Price Elasticity of Demand a. Which of the following goods are likely to be price elastic, based on changes in demand, and which are likely to be price inelastic? Explain your reasoning; including considering the factors that determine the price elasticity of demand, (response is limited to 1/2 a page). Natural Gas (used for heating a home) (0.5 points) Cheerios Cereal (0.5 points) b. Consider, Taylor, shopping for groceries. Last week, the price of onions was $1.25 per pound (Ibs.), and Taylor was willing to buy 4lbs. Today, the price has gone up to $1.50 per pound, and Taylor is now only willing to buy 2lbs. Showing your calculations, what is Taylor's elasticity of demand? (0.5 points) Page 1 of 3 Focus EO !!! English (United States) 1 Accessibility: InvestigateALGONQUIN COLLEGE | Online - Explain if Taylor's demand for onions elastic or inelastic. (0.5 points) 2. Price Elasticity of Supply a. Which of the following goods are likely to be price elastic, based on changes in supply and which are likely to be price inelastic? Explain your reasoning, including considering the factors that determine the price elasticity of supply, (response is limited to 1/2 a page). Electrical Power (1 point) Colgate Whitening Toothpaste. (1 point) b. Consider the quantity supplied of a new electric vehicle increased from 1000 units to 1500 units when the price increased from $50,000 to $8,000 per unit. Calculate the price elasticity of supply using the midpoint formula. (1 point) Explain if the price elasticity of supply is elastic or inelastic. (1 points) 3. Monopolies vs Competitive Firms (response is limited to one page). Research a real world example of a monopoly and provide a brief explanation as to why you believe it is a monopoly (i.e. what barriers to entry are there) a. Explain, how this firms behaviour (think in terms of pricing, production decisions, innovation, etc.) would differ if the barriers to entry no longer existed, and the market became competitive. (1 point) Considering the impact of this monopoly on the consumer, should the government intervene with price controls, such as a price ceiling? Explain your reasoning. (1 point) 4. Costs of Production (A Case Study): Consider the owner of a small woodworking business that specializes in constructing custom-made furniture and fixtures. The owner has two woodworkers on staff that assist in fulfilling customer orders. Each woodworker receives a monthly salary of $3,000. Additionally, the owner purchased raw materials such as lumber, finish, and hardware, totaling $1,500 per month. The owner owns a small workshop. However, if they were to rent a similar workshop nearby, it would cost $1,000 per month. Page 2 of 3 English (United States) Accessibility: Investigate FocusALGONQUIN COLLEGE | Online a. What are the explicit costs of production for the woodworking company? Explain your calculation and provide the total explicit costs (1 point) b. Considering this opportunity cost, what are the implicit costs of production for the business? (1 point) Per month, the woodworking company generates a total revenue of $15,000 from commissioned orders. The explicit costs of production amount to $8,000, while the implicit costs total $1,500. c. What is the accounting profit for the company? Show your calculation and provide the final accounting profit. (1 point) d. What is the economic profit for the woodworking company? Explain your calculation and its implications. (1 point) Submission Procedures: Your assignment should be typed (Calibri or Ariel, 12-point font) and submitted as a digital document (e.g., Word, PDF). Clearly label each response (1(a), 1(b), etc.). The total of your response to task la should be limited to 1 page in length The total of your response to task 2a should be limited to 1 page in length For calculations, show all your work to receive full credit. Include proper citations and references for any external sources used. Submit your completed assignment by [Deadline]. Scoring: / 10 Weighted total 15% (1.5% per point) English (United States) ' Accessibility: Investigate Focus