Q2.Consider the following demand and supply relationships in the market for golf balls:Qd = 90 ? 2P ? 2T and Qs = ?9 + 5P ? 2.5R, where T is the price of titanium, a metal used to make golf clubs, and R is the price of rubber.

A.At the equilibrium values calculate the price elasticity of supply

B.At the equilibrium values, calculate the cross-price elasticity of demand for golf balls with respect to the price of titanium. What does the sign of this elasticity tell you about whether golf balls and titanium are substitutes or complements?

Q3. A motor dealer sells two models, a low price entry-level small car, and a high priced, luxury sports convertible. At the end of the last financial year they had sold 4,000 small cars at a price of 6,000 OMR and 400 sports models at a price of 32,000 OMR. During the last year the real incomes of the customers rose on average by 10%. Sales of the sports model increased to 500, but sales of the small car declined to 3,850. What is the income elasticity of demand for the two models? What does this tell you about the two models?

Q4. The operating results of a company for two years are as follows:

Sales RO Profits RO

2004 270000 6000

2005 300000 15000

Assuming that the cost structure and the selling price per unit remain the same, you are required

to calculate:

1. P/V ratio.

2. Fixed cost.

3. BEP.

4. Variable cost for 2004 and 2005.

Q5.

From the following data , you are required to calculate break-even point and net sale value at this point Fixed overhead 50000 OMR Variable overhead @ 60% on direct labour Direct material cost per unit 10 OMR Direct labour cost per unit 5 OMR Direct overheads=100% of direct labourSelling price per unit 250MR Trade discount 4% If sales are 10% and 25% above the breakdown volume, determine the net profits