Explain the type of pricing strategy that you as the manager of a company would implement
for Good X and Good Y with the following price elasticity of demand co efficients. Use diagrams to motivate your answer.
a) . Good X: 2.3 (10)
b) . Good Y: 0.6 (10)
QUESTION TWO [25]
2.1 Explain the kinked demand curve theory of an oligopoly. Include in your answer a
discussion of a contemporary oligopoly. (13)
2.2 Discuss and motivate whether the following market structures can engage in price discrimination.
2.2.1 Perfect competition (6)
2.2.2 Monopoly (6)
QUESTION THREE [20]
Questions 3.1 to 3.3 relate to the diagram below.
Output
POSTGRADUATE DIPLOMA IN MANAGEMENT – ACADEMIC AND ASSESSMENT CALENDAR
3.1 Choose a contemporary business and discuss two factors that bring about the
economic concept illustrated in Panel A for that business. (14)
3.2 Explain the meaning of the LAC curve in Panel C. (6)
QUESTION FOUR [35]
4.1 Assume the aggregate demand of an economy is rising at 3%, but its productive
capacity is only rising at 2%. Discuss the type of inflation this would lead to. Use a diagram to motivate your answer. (20)
4.2 Explain how fiscal policy can be implemented if an economy is in the downswing of a
business cycle. (15)
This is a research based assignment and requires evidence of research.
END OF ECONOMICS ASSIGNMENT