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[Solved] ECO402 Assignment 2 Fall 2020


admin
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MICROECONOMICS (ECO402)

ASSIGNMENT # 02

DUE DATE: 18TH  FEBRUARY, 2021   MARKS: 15

 

The Case:

Pakistan Water and Power Development Authority (WAPDA) was established in 1958. It is an autonomous and statutory body under the administrative control of the Federal Government. WAPDA has a monopoly on producing electricity. The generation, transmission, and distribution of power is the responsibility of the WAPDA. In 2019-20, the total installed capacity of electricity was 36200 MW. Suppose that the amount of electricity for a household and its price are given below:

 

Q (units)

P (Rs.)

225

11

300

10

350

9

400

8

 

Requirements:

Keeping in mind the above scenario, solve the following questions.

 

  1. Calculate total revenue (TR), average revenue (AR), and marginal revenue (MR) for each Marks: 12 (4+4+4) Note: Calculate TR, AR, and MR in table form.

 

Q (units)

P (Rs.)

TR

AR

MR

225

11

?

?

?

300

10

?

?

?

350

9

?

?

?

400

8

?

?

?

 

  1. Why marginal revenue is less than price (MR<P) in the case of monopoly. Marks: 3

 

 

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mobeen.sheraz
(@mobeen-sheraz)
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Joined: 12 months ago
Posts: 21
 

where is the solution???

 


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mobeen.sheraz
(@mobeen-sheraz)
Eminent Member
Joined: 12 months ago
Posts: 21
 

when the solution will be available?


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admin
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@mobeen-sheraz

Pls start discussion here among other students and try to solve it point by point, until the availability of solution file./Thanks

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mobeen.sheraz
(@mobeen-sheraz)
Eminent Member
Joined: 12 months ago
Posts: 21
 

there will be no solution available here????

 


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admin
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Admin
Joined: 3 years ago
Posts: 6638
Topic starter  

ECO402 Assignment 2 Fall 2020 solution idea:

 

Question :

 

Units(Q)

Price(Rs.)

150

12

250

11

300

10

350

9

400

8

 

Calculate

  • total revenue (TR)
  • average revenue (AR), and
  • marginal revenue (MR) for each quantity.

 

Answer (A)

Units(Q)

Price(Rs.)

total revenue (TR)

average revenue          (AR)

marginal revenue (MR)

225

11

2475

11

2475

300

10

3000

10

525

350

9

3150

9

150

400

8

3200

8

50

 

Answer (B)

In a monopoly there is a price effect in comparisonto a competitive firm which has no price effect and has to sell goods at a given price. Monopolist must reduce price to sel additional out put.so the marginal revenue (MR) on its additional unit sold is lower then the price because it gets less revenue for previous units as well as.

 

 

Download attachment for ECO402 assignment 2 solution file.


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