Short answers Coursework Example | Topics and Well Written Essays - 250 words

laconic answers - Coursework ExampleSo under such situation the seller will pass the entire appraise burden on the consumer and will remain unaffected himself.If the hurt elasticity of demand (PED) of a issue is 0.75, then it means that the product has an inelastic demand. This means a percentage change in legal injury is not followed by a significant change in quantity demanded. If the hard decides to increase the price by 20 % then quantity demand will be negligibly affected and the centre tax income will increase.Total revenue increases if either price increases or QD increases. Here price is increasing by a greater proportion then the decrease in QD, therefore the overall total revenue for the firm will also increase.The above shows that after the price change, the peripheral utility per dollar dog-tired on pretzels is higher(prenominal) than the marginal utility per dollar spent on beer. Under such parcel the consumer should spend more on pretzels and less on beer. He should continue to do so until the marginal utility per dollar spent on both the goods become equal.If by hiring additional labor the total output increases with the decreasing rate, then the labor can said to have diminishing returns e.g if a firm hires 4th unit of labor, then the total output increases by 10 units. However when the firm hires fifth unit of labor, then the total output increases by 8 units only. So under such situation the total output is increasing plainly with a decreasing rate, this is known as diminishing returns. as well if a firm currently has 4 labors and they were producing 300 units per day. Now if the firm hires 5th unit of labor, but they manage to produce only 270 units per day, then this is known as negative returns, as the total output decreases with additional labor.The good produced under perfect competition are homogenous i.e goods of an individual firm is on the nose identical to the goods of the other firm, they are perfect substitutes. So if an individual firm tries to charge a higher price on the