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Answer: In the long run equilibrium in a perfectly competitive market, local farmers are operating at ii. zero economic profit. This means that the price of the tomatoes in the market is at the same level as the cost of

Answer: Monopolist Profit Per Unit The monopolist profit per unit is equal to R280. This is because the difference between the Total Revenue line (TR) and the Total Cost line (TC) is equal to R280 per unit. Monopolies have the

Answer The maximum value of total product for this firm is 40. This is determined by adding up the number of baskets produced by each machine and labour in the short run, as shown in Table 1. Table 1 Machine

Answer The correct answer is option b) only ii. At the maximum point of the total product curve, average product is not equal to zero. Total product starts by increasing at an increasing rate and then increases at a decreasing

Answer: This Firm Should Maximise Profits by Producing 8 Widgets In a perfectly competitive market for widgets, the market price is R15. This means that, in order to maximize profits, a firm producing widgets in this market should produce 8

Answer: Explaining a Movement from Point p1q2 to Point p1q1 The figure 12.1 shows the demand and supply curves for a specific brand of instant noodles. A movement from point p1q2 to point p1q1 is likely due to a decrease

Answer: Price Elasticity of Demand (PED) Price elasticity of demand is a measure of the responsiveness of the quantity of a good or service demanded to a change in its price. The PED for Sarah’s hand-painted vases is calculated by

Answer: Demand Curve for Good B When the demand for Good A (Whole Wheat Bread) increases due to a health trend, it will shift the demand curve for Good B (White Bread) leftward. This is because Good A and Good

Answer: Equilibrium Price & Quantity The equilibrium price (EP) and equilibrium quantity (EQ) for a given demand and supply schedule is determined by the intersection of the two curves. When the demand and supply curves intersect, this is the equilibrium

Answer The answer to the question is option B, an increase in equilibrium quantity but a decrease in price. This is because when there is a strike by workers on wine farms, the supply of wine decreases. As a result,

Answer Figure 11.1 is a graphical representation of a production function. It shows the marginal product of labor, the additional output generated from the hiring of an additional worker, as well as the marginal cost of labor, the additional cost

Answer The firm’s profit-maximising daily output in the short run is 100 units. This can be determined by looking at the figure below, which shows the price, marginal cost, and average cost curves facing a perfectly competitive firm in the

Answer: The answer is d) maximise profits by producing 8 widgets. In a perfectly competitive market, a firm is a price taker and cannot influence the market price. Therefore, the firm must accept the market price of R15 and produce

Answer: Price Elasticity for Business Travellers vs. Holiday Travellers The price elasticity for business travellers travelling between Durban and Cape Town will be inelastic, compared to the price elasticity for holiday travellers. This is because airline tickets are more of

Answer The answer to the question is option C, R210. This is because the economic profit of Jack’s Enterprise is calculated by subtracting its total revenue (TR) from its total cost (TC). The total revenue can be calculated by multiplying

Answer: Introduction The diagram below illustrates the effects of a rent increase for food outlets on campus on the equilibrium price and quantity of pies. The answer to the question is that in comparison with the original equilibrium E0, there

Answer: Price Inelastic The demand for café lattes, as calculated above, can be classified as price inelastic. This means that when the price of café lattes rises from R15 to R20, the quantity demanded decreases, but not proportionally. In this

Answer: The Effect of a Decrease in the Price of Potatoes on Sweet Potato Markets The recent rising input costs in the agricultural sector, as expressed by Agri SA and Agbiz, are concerning for the industry. In particular, Sunshine Markets,

Answer: The Total Cost of the Monopolist The total cost of the monopolist is equal to R25 000. This is the sum of all the costs associated with the production of the product or service including fixed costs, variable costs

Answer The answer to the question is b) Increases and then decreases. The price elasticity of demand increases as the price moves from point A to point B and then decreases again as the price moves from point B to

Answer The demand curve in the figure shows that the price elasticity of demand is increasing from point A to point B and then decreasing from point B to point C. Therefore, the correct answer is option b, increases and

Answer The correct answer is b) Increases and then decreases. As the price of a product increases, the demand for the product usually decreases. This is represented by a downward-sloping demand curve. In the graph, the demand curve moves from

Answer The equilibrium price (EP) and equilibrium quantity (EQ) for the given demand and supply schedules is EP (40) and EQ (70). This is determined by looking for the point where the quantity demanded and quantity supplied intersect. In this

Answer: Equilibrium Price and Quantity The equilibrium price (EP) and equilibrium quantity (EQ) is determined by the intersection of the demand and supply curves. In the given demand and supply schedules, the EP and EQ can be determined by finding

Answer: Cooking Oil Prices The price of cooking oil has been on the rise over the past year, and is expected to remain high over the next few months. This is due to a global shortage of oil producing crops,

Preparing a Cash Flow Statement A cash flow statement is a financial statement that summarizes the cash inflows and outflows of a company over a given period of time. It provides insight into the liquidity of a company and helps

Answer: Cooking Oil Prices Cooking oil prices are up 60%. This spike in the price of cooking oils is expected to remain high over the next few months, and could possibly extend until the end of the year. The crisis

Answer: The movement from point p1q2 to point p1q1 in the figure can be explained by an increase in the price of the good. An inferior good is a good whose demand decreases when income increases and vice versa. Therefore,

Answer: Explanation of Movement from Point P1Q2 to Point P1Q1 The movement in the demand curve from point P1Q2 to point P1Q1 can be explained by a decrease in buyers’ income. Inferior goods, such as instant noodles, are goods that

Answer: Effect on the Sweet Potato Market of a Decrease in the Price of Potatoes The rising costs of direct materials, labour and other overheads in the agricultural sector have been a source of concern for organizations such as Agri

Answer: Demand Curve for Good B Shifted Leftward The demand for Good A (Whole Wheat Bread) has increased due to a health trend that promotes whole wheat products, which has shifted the demand curve for Good B leftward. When the

Answer: Option a) 0.8 Price Elasticity of Demand (PED) is a measure of the responsiveness of quantity demanded to a change in price. It is calculated by the formula: PED = % Change in Quantity Demanded / % Change in

Answer: Bob’s Heirloom Tomatoes Exhibiting Perfectly Inelastic Demand Elasticity Bob’s heirloom tomatoes are exhibiting perfectly inelastic demand elasticity. This means that when Bob increases the price of his tomatoes by 30%, the quantity demanded remains the same regardless of the

Calculating Economic Profit of Jack’s Enterprise Jack’s Enterprise is a monopolist facing a demand curve with a constant marginal cost of R5. To calculate the firm’s economic profit, we must first calculate the total revenue (TR) and marginal revenue (MR)

Answer: Bob’s Heirloom Tomatoes Exhibit Perfectly Inelastic Demand Bob’s heirloom tomatoes exhibit perfectly inelastic demand, meaning that the quantity demanded of the product remains constant regardless of price changes. This means that when the price of the tomatoes is increased

Answer The answer to the question is C) $7.50. This is because the opportunity cost of producing eight facial tissues when moving from combination B to C is $7.50. This is calculated by taking the difference in cost between the

Why is our National Capital Degrading? Our national capital is degrading as a result of many different factors, including economic, political, and environmental forces. These forces are causing a decrease in the quality of life for those living in the

Answer: The total cost of the monopolist is equal to c) R18 000. Explanation: The total cost of the monopolist is the sum of all costs associated with producing the good, including the opportunity cost of not producing a different

Answer: Short-Run Monopoly Equilibrium of Sarah’s Bakery In the figure below, Sarah owns the only bakery in a small town specializing in a unique pastry with high demand and limited competition, allowing her to set the price at a level

Answer India is projected to have the highest population in the world by 2050 due to its high fertility rate and relatively young population. India’s fertility rate, which is the number of children a woman has in her lifetime, is