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1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
Call us at : 08263069601
(Prefer mailing. Call in emergency )
Assignment
Drive Semester2017
Program Master of BusinessAdministration- MBA
Semester 1
Subjectcode & name MB0042 – MANAGERIALECONOMICS
Book ID B1625
Creditand Max. Marks 4 Credits, 60 Marks
Question 1. Define Law of Demand and discuss the various exceptions to
the law of demand
Answer : Law of demand : The lawof demandstatesthat, all otherthingsbeingequal,the quantitybought
of a good or service isa functionof price.Aslongas nothingelse changes,people will buylessof something
when its price rises.
 The demandschedule tellsyouthe exactquantitythatwill be purchasedatanygivenprice.Here'sa
real-life example of how this works in the demand schedule for beef in 2014.
 The demand curve plots those numbers on a chart
Question 2. Explain the features of LAC curve with a diagram
Answer: The Long Run Average Cost,LRAC,curve of a firmshowsthe minimumorlowestaverage total cost
at which a firm can produce any given level of output in the long run (when all inputs are variable).
Features of LAC curve
(i) The LAC curve is tangential to the various SAC curves:
Question 3. Critically examine Baumol’s static and Dynamic Models
Answer : Static model is more structural than behavioral while dynamic model is a representation of the

2. behaviorof the staticcomponentsof the system.Staticmodellingincludesclassdiagramandobjectdiagrams
and help in depicting static constituents of the system. Dynamic modelling on the other hand consists of
sequence of operations, state changes, activities, interactions and memory.
Question 4. Explain Perfect Competition and the equilibrium of a firm
under perfect competition in the long run
Answer: Perfectcompetitiondescribesamarketstructure wherecompetitionisatitsgreatestpossiblelevel.
To make it more clear, a market which exhibitsthe following characteristics in its structure is said to show
perfect competition:
 Large number of buyers and sellers
 Homogenous product is produced by every firm
 Free entry and exit of firms
 Zero advertising cost
 Consumers have perfect knowledge about the market and are well aware of any changes in the
market. Consumers indulge in rational decision making.
Economic Profit and Economic Loss
Economicprofitsandlossesplayacrucial role inthe modelof perfectcompetition.The existenceof economic
profits in a particular industry attracts new firms to the industry in the long run. As new firms enter, the
supply curve shifts to the right, price falls, and
Question 5. Discuss the working of the multiplier and explain the various
leakages in multiplier.
Answer : A numberwhichindicatesthe magnitude of aparticularmacroeconomicspolicymeasure.Inother
words, the multiplier attempts to quantify the additional effects of a policy beyond those that are
immediately measurable.
Working of Multiplier :
Multiplieristhe mechanismthroughwhichincome getspropagatedasa resultof addedinvestment.Howa
new investment brings about a multiple increase in income by
Question 6. Explain Oligopoly. Explain the features of Oligopoly market.
Answer : An oligopoly is a market form wherein a market or industry is dominated by a small number of
sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and
lead to higher prices for consumers. Oligopoly has its own market structure. The Oligopoly Market
characterized by few sellers, selling the homogeneous or differentiated products. In other words, the
Oligopolymarketstructureliesbetweenthe puremonopolyandmonopolisticcompetition,wherefewsellers

3. dominate the market and have control over the price of the product.
Homogeneous product: The firms producing the homogeneous products are called as Pure or Perfect
Oligopoly. It is found in the producers of industrial products
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Send your semester & Specialization name to our mail id :
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