Theories of demand and supply questions | form five Economics

1. Outline five limitations of the theory of price mechanism
2. With the aid of diagrams, explain the following cases of elasticity

1. Inelastic supply
2. Elastic supply
3. Unitary elasticity of supply
4. Perfectly elastic supply
5. Perfectly inelastic supply

Answer / Solution

UNSOLVED

Explain the importance and limitations of price mechanisms

Answer / Solution

UNSOLVED

The following table shows demand of Juma and Kassim for a product.

1. On the same set of axes draw the demand curve for Juma(QJ) , demand curve for Kassim (QK) and the aggregate demand curve
2. What do you think might have caused the differences in demand by Juma and Kassim?
3. Whose demand is more elastic? Give reasons for your answer.

Answer / Solution

UNSOLVED

1. Explain four types of price discrimination.
2. How can monopoly be controlled? (give six points).

Answer / Solution

UNSOLVED

Use the demand function (P​1​) and the supply function (P​2​) given below to answer the questions that follow.

Where: P = Price
Q = Quantity
Graphically solve for:

1. Equilibrium price and quantity.
2. Surplus and shortage when equilibrium price rise and fall by two (2).

Answer / Solution

UNSOLVED