Last Healthcare using Excel - Statistics Project Example

Fundamentals of microeconomics al Affiliation) Question one Market A market refers to a medium that allows buyers and sellers of a particular good or service to interact in order to enhance an exchange process. Various issues may determine the price that the customers pay at the time of transaction, though price is majorly determined by the principles of demand and supply (Zubair & Habibah, 2011). Market equilibriumThe market equilibrium refers to the situation in which the quantity of products and services is equal to the products and services supplied.

This principle makes the price to become more stable. When there is high supply of goods and services, the price decreases resulting in a higher demand.Preparation of a schedule and drawings of demand and supply curvesPrice (X) in dollars246810Quantity demanded8876645240Price (X) in dollars12345Quantity supplied 3134374043The price and output level at the point of equilibrium in the marketAt equilibrium, the quantity demanded is equal to the quantity supplied (Zubair & Habibah, 2011).Therefore, Qd = Qs, meaning that 100-6P= 28+3P -6P-3P = 28- 100 -9P = - 72 P = 8 dollars The Qd = 100 – (6*8) Qs = 28 + (3*8) Q = 52 units Q = 52 unitsAt equilibrium: The price level = 8 dollars The quantity level = 52 units Question twoa) Equilibrium price=$30, price where quantity of barrels demanded equals the quantity supplied.b) Total revenue(TR)=q*p TR= (50, 000000*40)=$2 billionc) TR=Quantity supplied*price 50,000,000*50 =$2.

5 billionThe total revenue (TR) will increase i.e. from $2 billion to $2.5 billion.d) Elasticity of demand is a ration used to show the understanding of price in terms of ratio in quantity demanded to price: Price Elasticity of demand is the ratio of quantity demanded to the price in form of percentage (Zubair & Habibah, 2011). Change in Qd = 30 – 40 = - 10 % change = -10 * 100% = - 10 % Change in price = 40 – 30 = 10 The change in % = 10 * 100% = 10 % = (- 10 / 10) Therefore, the price elasticity of demand is equal to – 1 unit.

Price elasticity of supply The price elasticity of demand refers to the ratio of the quantity supplied to the price in form of percentage.The change in the Qs = 50 – 40 = 10 units The % change in supply = 10 * 100% 10 %The change in the price = 40 – 30 = 10 dollarsThe % change in price = 10 * 100 % = 10 %The price elasticity is illustrated as (10/10) % The result that indicates the price elasticity is equal to 1 unit. Question threeThe law of diminishing marginal utility The law of diminishing marginal utility refers to the state that when an individual increases the consumption of a commodity and at the same time keeping the consumption of other products constant, there is a decrease in the in the marginal utility that the individual originates from consuming each extra unit of that commodity (Zubair & Habibah, 2011).

The formula for calculating the marginal utility is equal to change in the total utility over the change in the number of units consumed by an individual.Units consumed of goods ATotal UtilityMarginal Utility120-235153451045055500645-5735-10a. The marginal unit of consuming three units of good A is equal 10units. b. The level of consumption at the point where the marginal utility is zero is equal to consumption of five units of good A.c. The level of consumption at which the total utility will reach at maximum is the point where the individual will consume five units of good A.d. The point at which the level of consumption where the marginal utility becomes negative is the point where an individual consume six units of good AQuestion fourConsumer surplus The consumer surplus refers to the economic measure of a consumer satisfaction that is calculated by evaluating the difference between what the consumers are ready and able to pay for a good or service virtual to its market price (Zubair & Habibah, 2011).

The case of a consumer surplus will probably occur when the consumer is ready and able to pay more for a given product or service than the current market price. Producer surplus The producer surplus refers to the economic measure of the difference between the value that a producer of a commodity receives and the least amount that the individual would be willing and able to accept for the commodity (Zubair & Habibah, 2011). Therefore, the surplus or difference is the benefit that the producer receives for selling the commodity in the market.

Question fiveLaw of supply The law of supply states that, ceteris paribus, (all factors kept constant), the price and quantity supplied of goods and services are directly proportional to each other.How the following factors will shift the supply curvea. Number of producers increasing in the marketWhen the number of producers increase in a market, the supply will automatically decline due to the excess suppliers who are will and able to supply goods and services. The price of supply will also fall.b. Advancement in electronic technologyAdvancement in technology will create a rise in supply because relevant information on where to supply next will be easy to know.

An increase in technology leads to an increase in supply. This is a non-price factor.c. Increase of prices of raw materialsAn increase in the cost of raw material will automatically increase the price of production. The selling price and the supply will also increase.d. Expectation of increase in oil prices during next monthThe expectation of future increase of oil will increase the quantity demanded making the supply and the prices to rise (Zubair & Habibah, 2011).ReferenceZubair Hasan., & Habibah Lehar.,. (2011).

Fundamentals of microeconomics. Oxford: Oxford University Press.