Discuss binding price ceiling and binding price floor

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Reference no: EM132078380

Question 1

Considering oil as an inelastic product, discuss why OPEC cannot keep price of oil high? You need to consider the type of good, price elasticity of demandand supply, and the time factor. Your answers must company twodiagrams, one foreach timeframe.

Question 2

Discuss binding price ceiling and binding price floor with an example. Your answersmust companytwo diagrams, one for each. Youare allowed to refer to concepts/context in prescribedtext book; however,discussion will haveto come from academic sources.

Question 3

Discuss various measures of cost by completing thefollowing table.This should includefixed and variable costs, averagetotal cost, average variablecost, averagefixed cost, andmarginal cost. Show all of thesein one diagram in relation to Quantityand Price.

Quantity of soap sold per hour

Total cost($)

Fixed cost($)

Variablecost($)

Average fixed cost($)

Average variable cost($)

Average total cost($)

Marginalcost($)

0

8.0

8.0

0.0





1

8.30


0.30





2

8.50


0.50





3

9.80


1.80





4

10.10


2.10





5

10.20


2.20





6

10.60


2.60





7

11.0


3.0





8

11.30


3.30





9

11.60


3.60





10

12.0


4.0





Reference no: EM132078380

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