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Practise Assignment 1

1. The document provides production data for a pizza factory including output quantities for different numbers of workers. It asks to draw graphs of total, marginal, and average product and explain the relationship between these values. 2. It also provides cost data for a motor company and asks to complete the table and explain relationships between marginal cost, average cost, and the equilibrium condition when minimizing costs subject to a quantity constraint. 3. Finally, it asks questions about market structure, demand forecasting methods, market concentration, and the role of the Herfindahl–Hirschman Index.

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vivek shukla
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40 views2 pages

Practise Assignment 1

1. The document provides production data for a pizza factory including output quantities for different numbers of workers. It asks to draw graphs of total, marginal, and average product and explain the relationship between these values. 2. It also provides cost data for a motor company and asks to complete the table and explain relationships between marginal cost, average cost, and the equilibrium condition when minimizing costs subject to a quantity constraint. 3. Finally, it asks questions about market structure, demand forecasting methods, market concentration, and the role of the Herfindahl–Hirschman Index.

Uploaded by

vivek shukla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Practise assignment [Submit it by 23rd Oct.

Hand written] Problem set : “Theory of


Production Cost and Market”
1. Production function in short run of a pizza factory. Complete the table and draw
Graph of TP, MP and AP in one graph paper:
No. of Output APL MPL Output
workers (quantity of elasticity of
Pizzas labour
produce per E=% change in
hour) or Total output) / (%
product change in
labour)
0 0
1 3
2 8
3 12
4 14
5 14
6 12

a) Draw the graphs of TPL, MPL and APL. Explain the graph.
b) What happen at point of Inflection?
c) Why APL said to be asymptotic in nature?
d) What is the relationship between APL and MPL. ?

2. Sharda Motor need an economist who is conversant with the cost output relationship.
In order to test this knowledge, the company has designed a small test based on
certain cost-output data from its own company. The same are given below:

Q TVC TFC TC AFC AVC ATC MC


0 0 250
10 50 250
20 80 250
30 120 250
40 170 250
50 230 250
60 300 250
70 380 250
80 470 250
90 570 250
Where Q=Output, TC = Total Cost, MC Marginal Cost, TFC=Total Fixed Cost,
TVC=Total Variable cost, AFC= Average Variable Cost, AFC= Average Fixed Cost,
AVC= Average Variable Cost, ATC= Average Total Cost.
The company requires the candidate to complete the above table.
3. What is the relationship between MC and AC. Explain through graph. Can anyone
explain through mathematically?
4. Features of Isoquant. When We minimize cost subject to constrain Quantity what is
the equilibrium condition. Explain through graph.
5. Four market Structure
Structure No. of firms Control over Types of goods Barriers to entry
price
Perfect
Competition
Monopolistic
Competition
Oligopoly

Monopoly

6. Why to measure the market concentration HHI play a vital role?

7. Demand forecasting use every method you learnt to calculate MAD, MAPE, St, YtSt
Year Quarter Period Revenue
2007 1 1 635
2 2 604
3 3 560
4 4 545
2008 1 5 540
2 6 517
3 7 487
4 8 500
2009 1 9 432
2 10 407
3 11 402
4 12 459
2010 1 13 346
2 14 297
3 15 293
4 16 332

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