MANCOSA: BCOM (SUPPLY CHAIN MANAGEMENT) YEAR1 is a substitute for ice-cream and
ID: 1140977 • Letter: M
Question
MANCOSA: BCOM (SUPPLY CHAIN MANAGEMENT) YEAR1 is a substitute for ice-cream and waffles are a complement of both if the pricn one can expect that tals he demand for fresh cream will increase and the quantity of waffles dema ent of both. if the pricn of nd for fresh cream will decrease and the demand for walt The quantity of fresh cream demanded will decrease The quantity of fresh cream waffies will increase and the demand for waffles will increase. nded will ncre demanded will decrease and the quantity of waffles demanded wll increase. s if the price and the quantity of screwdrivers exchanged falis,it i likely that a) Demand for screwdrivers has increased is likely that Demand for screwdrivers has decreased. l Supply of screwdrivers has decreased. d Supply of screwdrivers has increased 1.6 Overproduction of apples causes farmers' incomes to fall. This is an example of a) Perfectly elastic demand. b) Elastic demand. c) Unitary elasticity of demand. Inelastic demand. 1.7 Which one of the following statements is correct? a) If the price elasticity of the demand for ice cream is greater than one, then the suppliers of ice cream can increase their total revenue by raising the price of ice cream b) The price elasticity of demand stays the same at each point along a linear demand curve. c) If a 10 per cent increase in university fees results in a 5 per cent reduction in the quantity of university education demanded, then the demand for university education is price elastic. d) If the price elasticity of the demand for bread is less than one, a decrease in the price of bread wil lower the total revenue of the suppliers of bread. a) All factors employed are earning an amount equal to their opportunity costs. b) Firms are earning enough to cover all the costs of production. c) Price must be greater than average variable cost. 1.8 Normal profit implies that: 1.9 A firm finds that by producing and selling the last unit of its product, the marginal revenue it earns is R40 a ly if it is a monopolistic firm All of the above. the marginal cost it incurs is R35. In order to maximise profits, the firm should: a) Decrease its output if it is a perfectly competitive firm, but not necessari but not necessarily if it is a perfectly competitive firm c)Increase its output irrespective of the type of firm it is d) Decrease its output irrespective of the type of firm it is b) Decrease its output if it is a monopolistic firm,Explanation / Answer
Ans14) the correct option is b) the demand for fresh cream will decrease and the demand for waffle will increase. Since the price of ice cream fell the people will start consuming more ice cream rather than fresh cream. Waffle is consumed with ice cream so demand for waffle will also increase
Ans15) the correct option is b) demand for screwdrivers has decreased. When demand decreases the demand curve shifts to the left and equilibrium price and quantity decrease.
Ans16) the correct option is inelastic demand. The overproduction has occurred due to the inelastic demand.
Ans17) the correct option is d). If the price elasticity of the demand for bread is less than one, a decrease in the price of bread will lower the total revenue of the suppliers of bread. The change in price will lead to a smaller change in quantity demanded.
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