Solve the following
ocew/content/group/1:406fble 2593-423d-bf71-710356373a56/Problem?120sets/Lcon101P57.pdf of quantity. Then find marginal revenue as the derivative of total revenue with respect to quantity. Plot MR, and explain why it is downward sloping- (e) The monopolist's optimal quantity occurs where MC crosses MR. Mark this quantity on the graph, and make sure it matches your answer to 2(d)- (f) Also mark the monopolist's price Pm from 2(e). Is this price above or bekes ATC at that quantity? Explain why you knew that would be the case. (g) The competitive market outcome happens when the demand function crosses marginal cost (the supply function in a competitive market). Find p" and y" as if the market were competitive. Mark these on the graph. 4. This question concerns surplus and efficiency of the market under monopoly. (a) On the graph you just drew, shade/color (and label) the areas corresponding to producer and consumer surplus under the monopoly outcome. (b) Calculate consumer and producer surplus. Note that producer surplus is a trapezoid; you can calculate its area either by splitting it into a rectangle and a triangle, or by using the formula for the area of a trapezoid (Google it if you don't know). (e) Recall that producer surplus is profit plus fixed cost. Is that the case here? (d) On the graph you drew in question 2, shade/color (and label) the area that represents the deadweight loss from having the monopolist outcome (Pa. ym) rather than the com- petitive outcome (p' y') then calculate its value. 8NAME: Yulie Live UIZ on price elasticity of demand Multiple Choice dentify the choice that best completes the statement or answers the question. NOTE: You may write on this questionnaire for your computations. 1) An economist estimates that .83 is the price elasticity of demand for disposable razors. This suggests that disposable razor producers could: A. advertise more to raise the price elasticity of demand. B. encourage more people to use non-disposable razors C. lower the price of disposable razors to raise more revenue. D. maximize revenues by staying at the current price. E. raise the price of disposable razors to raise more revenue. 2) If Johnny, the Pizza Man, lowers the price of his pizzas from $6 to $5 and finds that sales increase from 400 to 600 pizzas per week, then the demand for Johnny's pizzas in this range is: A. price inelastic. B. price elastic. C. unit elastic. Exhibit 5-6 Demand curve for concert tickets 30 are 10 Quantity of thebelo per coarm thou generate? 3) In Exhibit 5-6, suppose promoters charge a price of $30 per ticket. How much total revenue will their sales A. $300,000. B. $400,000. C. $500,000. D. $600,000. 4) Anita is a famous attorney with a great reputation in court. She charges her clients $300 for each hour she spend working on their cases. If she earned $450,000 in hourly wages last year, and by raising her rates to $350 per hou her income increased to $490,000 what can we say about the elasticity of demand for Anita's legal services? A. It is approximately equal to 2.3. B. It is approximately equal to 1.6. D. It is approximately equal to 0.45. C. It is approximately equal to 1.0. E. It is approximately equal to 0.1. A. 0.25. 5) A health club sells 50 memberships when the monthly price is $60 and 70 memberships when the monthly price $40. The price elasticity of demand for memberships at this health club is: B. 0.6. D. 0.83 C. 1.0. E. none of the aboveMARKETS ") Distinguish between the terms "cum div" and "ex - div" as used in financial markets QUESTION 10 JUNE 2009 QUESTION ONE. ) Explain the main factors behind the rapid development of capital markets in your country QUESTION 11 a) DECEMBER 2006 QUESTIONS Discuss the role of a capital markets authority in the development of a country's financial my QUESTION 12 SIX a) Describe the benefits to a country of integrating its financial markets with those of other country QUESTION 13 a) Distinguish between primary and secondary securities market. b) "Despite the large investment in the stock exchange and the various government incentives, only few companies are listed at the stock exchange of the three East Africa Countries" . This was the opening remark by the guest speaker in a seminar whose theme was "Developing our capital market." Required: i) The advantage of being listed at the stock exchange. ii) Highlight four factors that may hinder companies from being listed at the stock exchange. QUESTION 14 a) Briefly explain how the "Dow theory " views the movement of the market prices of shares traded on a stock exchange b) Identify and briefly explain the factors that must be taken into account in the design and construction of a market index for shares c) Joseph Kimeu is trying to determine the value of Bidii Ltd's ordinary shares. The earnings growth rate over his planned six-year holding period is estimated to be 10% and the dividend payout ration in 60%. The ending price earnings (P/E) ration is expected to be 20 and the current earning per share are Sh. 4. The required rate of return for this share is 15%. Required Compute the market price of Bidii Ltd's ordinary share QUESTION 15 a) Briefly describe the three forms of capital markets efficiency, b) Highlight four factors that may underlie the low rate of listing of companies in a stock exchange you are familiar with. QUESTION 16 (a) Highlight four advantages and disadvantages to a company of being listed on a stock exchange (b) In relation to the stock exchange" Section 3 F.M
