## Business Economics June 2018 Assignment

1. Demand forecasting is not a speculative exercise into the unknown. It is essentially a reasonable judgement of future probabilities of the market events based on scientific background. Explain the statement by elaborating different qualitative and quantitative methods of demand forecasting. Which of the methods described by you is most suitable for forecasting the demand for “expensive mobile” and why?

2. Which market is characterized by the “competition among few”? How is this market different from the “competition among many”? Explain how the producers in this kind of market promote their own interests by giving real world examples like OPEC, Cement Cartels, etc.

3. A) Explain how the consumer attains utility maximisation and producer ensures cost minimization with the help of indifference curve and isoquant technique.

3. B) “There is a high cross elasticity of demand between new and old cars”. Discuss the statement by explaining the features of cross elasticity of demand. Also compare and contrast cross elasticity with other types of elasticities of demand.

## Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120

1. Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120.

2. Assume that at the price of ₹75, the demand for the product is 250 units. If the price of the product increases to ₹90, the demand decreases to 150 units. Calculate and analyse the difference in the value of price elasticity using Arc Elasticity Method and Percentage Method.

3. Alpha Ltd was planning to start production next year. Different departments of the company were working together to forecast the demand of the product in the market.

a) If you are manager of the company mention the steps and the factors that would be relevant for forecasting the demand of rice in the market.

b) The price of rice and its demand (in kg) produced by Alpha Ltd in 2018 is given in the table. Fit a linear regression line and estimate and analyse the demand for rice when price is Rs 50 per kg.

 Price(Rs/kg) 17 20 24 28 32 Demand(Kg) 80 75 65 60 54

## BUSINESS ECONOMICS – MBA ASSIGNMENT APRIL 2018

1. Suppose the demand equation for computers by Teetan Ltd for the year 2017 is given by Qd= 1200-P and the supply equation is given by Qs= 120+3P. Find equilibrium price and analyse what would be the excess demand or supply if price changes to Rs 400 and Rs 120.

2. Assume that at the price of ₹75, the demand for the product is 250 units. If the price of the product increases to ₹90, the demand decreases to 150 units. Calculate and analyse the difference in the value of price elasticity using Arc Elasticity Method and Percentage Method.

3. Alpha Ltd was planning to start production next year. Different departments of the company were working together to forecast the demand of the product in the market.

a) If you are manager of the company mention the steps and the factors that would be relevant for forecasting the demand of rice in the market.

b) The price of rice and its demand (in kg) produced by Alpha Ltd in 2018 is given in the table. Fit a linear regression line and estimate and analyse the demand for rice when price is Rs 50 per kg.

 Price(Rs/kg) 17 20 24 28 32 Demand(Kg) 80 75 65 60 54

## Quantity demanded for tea has increased from 300 to 450 units with an increase in the price of the coffee powder from Rs 25 to Rs 30

1. Calculate the following:

 Quantity Total Fixed Cost Total Variable Cost Total Cost Average Cost Marginal Cost 25 10 18 ? ? ? 26 10 10 ? ? ? 27 10 21 ? ? ?

Analyse the changes in the calculated costs as quantity produced increases.

2. Assume that a consumer consumes two commodities X and Y and makes five combinations for the two commodities:

 Combination Units of X Units of Y A 25 3 B 20 5 C 16 10 D 13 18 E 11 28

Calculate Marginal rate of Substitution and explain the answer.

3. a) Suppose the monthly income of an individual increases from Rs 20,000 to Rs 35,000 which increases his demand for clothes from 40 units to 50 units. Calculate the income elasticity of demand and interpret the result.

3. b) Quantity demanded for tea has increased from 300 to 450 units with an increase in the price of the coffee powder from Rs 25 to Rs 30. Calculate the cross elasticity of demand between tea and coffee and explain the relationship between the goods.

## Suppose the monthly income of an individual increases from Rs 20,000 to Rs 35,000 which increases his demand for clothes from 40 units to 50 units

1. Calculate the following:

 Quantity Total Fixed Cost Total Variable Cost Total Cost Average Cost Marginal Cost 25 10 18 ? ? ? 26 10 10 ? ? ? 27 10 21 ? ? ?

Analyse the changes in the calculated costs as quantity produced increases.

2. Assume that a consumer consumes two commodities X and Y and makes five combinations for the two commodities:

 Combination Units of X Units of Y A 25 3 B 20 5 C 16 10 D 13 18 E 11 28

Calculate Marginal rate of Substitution and explain the answer.

3. a) Suppose the monthly income of an individual increases from Rs 20,000 to Rs 35,000 which increases his demand for clothes from 40 units to 50 units. Calculate the income elasticity of demand and interpret the result.

3. b) Quantity demanded for tea has increased from 300 to 450 units with an increase in the price of the coffee powder from Rs 25 to Rs 30. Calculate the cross elasticity of demand between tea and coffee and explain the relationship between the goods.

## Assume that a consumer consumes two commodities X and Y and makes five combinations for the two commodities

1. Calculate the following:

 Quantity Total Fixed Cost Total Variable Cost Total Cost Average Cost Marginal Cost 25 10 18 ? ? ? 26 10 10 ? ? ? 27 10 21 ? ? ?

Analyse the changes in the calculated costs as quantity produced increases.

2. Assume that a consumer consumes two commodities X and Y and makes five combinations for the two commodities:

 Combination Units of X Units of Y A 25 3 B 20 5 C 16 10 D 13 18 E 11 28

Calculate Marginal rate of Substitution and explain the answer.

3. a) Suppose the monthly income of an individual increases from Rs 20,000 to Rs 35,000 which increases his demand for clothes from 40 units to 50 units. Calculate the income elasticity of demand and interpret the result.

3. b) Quantity demanded for tea has increased from 300 to 450 units with an increase in the price of the coffee powder from Rs 25 to Rs 30. Calculate the cross elasticity of demand between tea and coffee and explain the relationship between the goods.