This document provides information about obtaining fully solved assignments from an assignment help service. It lists an email address and phone number to contact for assistance with MBA course assignments. It then provides a sample assignment for the Managerial Economics course, covering all blocks and due by April 30th, 2014. The assignment includes 6 questions relating to topics like opportunity cost, demand curves, cost functions, oligopolistic markets, and the effects of supply and demand shifts. It concludes with a request to submit the completed assignment to the study center coordinator.

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ASSIGNMENT
Course Code : MS - 09
Course Title : Managerial Economics
Assignment Code : MS- 09/TMA/SEM-I/2014
Coverage : All Blocks
Note : Attempt all the questions and submit this assignment on or before 30th April , 2014 to the
coordinator of your study centre.
1. What is opportunity cost? Explain with the help of an example, why assumption of constant
opportunity cost is very unrealistic?
Ans : Opportunity cost :
In microeconomic theory, the opportunity cost of a choice is the value of the best alternative
forgone, in a situation in which a choice needs to be made between several mutually exclusive
alternatives given limited resources. Assuming the best choice is made, it is the "cost" incurred by
not enjoying the benefit that would be had by taking the second best choice available. The New
Oxford American Dictionary defines it as "the loss of potential gain from other alternatives when one
alternative is chosen". Opportunity cost is a key concept in economics, and has been described as
expressing "the basic relationship between scarcity and choice". The notion of opportunity cost plays
a crucial part in ensuring that scarce
2. (a) Explain law of demand with the help of a demand schedule and demand curve.
Ans : Meaning of demand :-
In ordinary language the word demand means desire . But in economics demand means desire
backed up by the enough money to pay for the good. Only desire can not be called demand.
There is also functional relationship between price and demand. Second point is that demand is
always per unit of time.
Law of demand :-

2. " Other things remaining the same when the price of any commodity increases its demand falls and
when price falls its demand increases."
(b) Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs
3 to Rs 2
Ans : Point elasticity is the price elasticity of demand at a specific point on the demand curve
instead of over a range of it. It uses the same formula as the general price elasticity of demand
measure, but we can take information from the demand equation to solve for the “change in” values
instead of actually calculating a change given two points. Here is the process to find the point
elasticity of demand formula:
Point Price Elasticity of Demand = (% change in Quantity)/(% change in Price)
Point Price Elasticity of Demand = (∆Q/Q)/(∆P/P)
Point Price Elasticity of Demand = (P/Q)(∆Q/∆P)
3. “Cost function expresses the relationship between the cost and its determinants.” Discuss this
statement giving examples from any firm of your choice.
Ans : Cost function :
In Economics we usually talk about two different types of costs, explicit and implicit. Implicit costs
incorporate all opportunity costs and rate of returns into your cost function. We have already
covered these types of costs in Macroeconomics. We will come back to them later in this course, but
for now we are going to focus on Explicit Costs. These are costs that must be paid; anything that you
actually receive a bill for is an explicit
4. “A characteristic of oligopolistic market is that, once the general price level is established it
tends to remain fixed for an extended period of time.” Discuss the economic rationale underlying
this phenomenon.
Ans : An oligopoly is a market form in which 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 costs for consumers.
With few sellers, each oligopolist is likely to be aware of the actions of the others. The decisions of
one firm therefore influence and are influenced by the decisions of other firms.[citation needed]
Strategic planning by oligopolists needs to take into account the likely responses of the other market
participants.
5. In any firm of your choice, try to find the effect of change in demand and change in supply on
price and quantity of product.

3. Ans : Effect of change in demand and change in supply on price and quantity of product :
Shift in Demand
When there is a change of one of the factors of demand- like the price of the product and related
goods, consumer preferences, or income- there is a corresponding change in the demand curve. For
instance, if someone's income grows, then his demand for goods will increase, shifting his demand
curve to the right. This will lead to a higher quantity being consumed at a higher price, ceteris
paribus. Conversely, there can be a negative effect that shifts the supply curve to the left where a
lower quantity is consumed at a lower price, ceteris paribus. This can occur when the price of
substitutes falls or consumers begin to lose their taste for the product.
Shift in Supply
6.Write Short Notes on the following:
(a) Value Maximization
(b) Envelope Curve
(c) Peak Load Pricing
Ans : (a) Value Maximization :
Firm value maximization is a business term. It is the practices of a firm to make the most of their
finances to maximize profits. The profits are either put back into the business or given to stock
holders or owners. Value maximization and stakeholder theory are two methods of determining the
goals of a business. Under strict value maximization, managers only consider whether a decision
increases the profits of the business without considering other community members. Under
stakeholder theory, managers consider how a decision affects other residents of the community .
Some theorists see value maximization as always conflicting with stakeholder theory. The use of
stakeholder theory implies that
(b) Envelope Curve :
The long run average cost curve is derived from a series of short run average cost curves and so is
often described as the envelope curve. If a firm is producing in the most efficient way possible in the
long run, but they then want to expand, they will have to expand along a short run average cost
curve as they will be limited by their fixed factors. However, in the long run they can get more of the
fixed factors and so will move back down to the long run average cost curve. This is why the LRAC is
made up of a series of SRAC curves.
Since LRAC envelopes all short run curves, hence it is called Envelope curve. LRAC can never cut
SRAC but it will be tangential to each SRAC at
(c) Peak Load Pricing :
Peak-load pricing is a pricing technique applied to public goods, which is a particular case of a
Lindahl equilibrium. Instead of different demands for the same public good, we consider the
demands for a public good in different periods of the day, month or year, then finding the optimal
capacity (quantity supplied) and, afterwards, the optimal peak-load prices.

4. This has particular applications in public goods such as public urban transportation, where day
demand (peak period) is usually much higher than night demand (off-peak period). By subtracting
the marginal costs of operation from the
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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or
Call us at : 08263069601
(Prefer mailing. Call in emergency )