Students Assessment Task 9

Students Assessment Task 9 - Assessment Task 9 Question...

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Assessment Task 9 Question 1. (This question is worth 10 marks of the total marks for this course.) In a small county town, the demand for bread is given by the equation ----- The supply of bread is given by the equation --------- P is the price of bread in cents and Q measures the number of loaves of bread per day. a. Draw the demand and supply curve for bread in this market, showing the value of the equilibrium price and quantity. (3 marks) b. Suppose that the government decides to impose a price ceiling of ------- per loaf of bread. What will be the impact of this decision? Show it on your diagram . (3 marks) c. Explain with the use of your diagram, how this decision results in a misallocation of resources (inefficiency) in the market for bread. (4 marks) Question 2 (This question is worth 10 marks of the total marks for this course.) The figures in the table below relate to a bakery producing pies. Use the information to answer the following questions. Variable Input Total Product Pies per day Marginal Product Fixed Cost $ Total Variable Cost $ Marginal Cost $ a. Complete the table. and draw a graph showing the marginal product curve. ( 4 marks)
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b. State and explain the “Law of Diminishing Marginal Returns. (3marks) c. If the bakery aims to maximise profits at what level of output will they produce. Explain your answer.
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Students Assessment Task 9 - Assessment Task 9 Question...

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