What is meant by the "profit maximising rule"? [2 marks]

QUESTION 2 [30 marks] (a) Given that the demand and supply curves for a product are as follows: D=100 - 0.25 P S= 40 + 0.75 P Calculate: (i) Equilibrium Price and Quantity of the product [4 marks] (ii) If government imposes a maximum price of 48, calculate the resulting shortage and discuss on its effectiveness of such a policy [8 marks] (iii) S=60 +0.75P Calculate equilibrium Price and Quantity if the supply equation changes to [4 marks] (b) A theatre decreases the price of its tickets from $10 to $8. As a result, its quantity demand for tickets increases from 400 to 450 units. Calculate the price elasticity of demand for theatre tickets. [5 marks] (c) The following table refers to the demand and supply conditions of beef in a given market for a given period of time. Price of Beef per kg ($) Demand for Beef (kg) Supply of Beef (kg) 1 40 15 25 25 15 30 10 35 5 5 40 Use the information above to plot a fully labeled diagram of demand and supply curves and clearly indicate the equilibrium price and quantity of beef. [5 marks] (d) Describe two factors that would cause supply curve for beef shift to the left. [4 marks]