Q.NO.1The packaged milk market in Pakistan is perfectly competitive.In the short run some of these firms may decide to shut down temporarily. In the long run some of these firms may exit the market, and new firms may enter. Draw and explain graphs to show these situations and short run and long run supply curves. If firms can enter and exit the packaged milk market in the long run but not in the short run, show how a decrease in demand due to lower incomes of Pakistani consumers during COVID Pandemic affects price and profitability.Q.NO.2 Why is marginal revenue less than the price for monopolies? Can marginal revenue ever be negative? Explain. Show the deadweight loss from unregulated monopolies. Explain your answer as it relates to WAPDA.Describe in detail the Public Policy measures that the government can use to manage government-created/state monopolies like WAPDA.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q.NO.1

The packaged milk market in Pakistan is perfectly competitive.

In the short run some of these firms may decide to shut down temporarily. In the long run some of these firms may exit the market, and new firms may enter. Draw and explain graphs to show these situations and short run and long run supply curves.
If firms can enter and exit the packaged milk market in the long run but not in the short run, show how a decrease in demand due to lower incomes of Pakistani consumers during COVID Pandemic affects price and profitability.

Q.NO.2

Why is marginal revenue less than the price for monopolies? Can marginal revenue ever be negative? Explain.
Show the deadweight loss from unregulated monopolies. Explain your answer as it relates to WAPDA.
Describe in detail the Public Policy measures that the government can use to manage government-created/state monopolies like WAPDA.

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