BUSINESS ECONOMICS

Email: smu.assignment@gmail.com

Mob: +919741410271 / +918722788493

1. Analyse various factors influencing the demand for a commodity. Which of these factorswill particularly influence demand for the following commodities? Why? a)Ice-cream b) Sugar c) Pen d) Designer Jean.

2. What do you mean by Monopolistic competition as a common type of market? Discusstwo important features of monopolistically competitive market – product differentiationand selling cost by taking real world cases. Also discuss how these twofeatures have an influence over the demand for products under monopolisticcompetition.

3. Read the paragraph below and answer the question given at the end of the paragraph.

a. According to a study of a rental market for VCDs, the price elasticity ofdemand for VCDs rental is 0.7. It means, 10% increase in the price of rentals,leads to 7% fall in the demand. This further means, the demand for VCD’s onrental is price inelastic. Mr. Jagjit, who is in the business of VCD rentals,increases the rentals by 25% on the basis of the information made available bythe study, with expectation of raising the revenue. But contrary to hisexpectation, his revenue in fact has decreased. What is the mystery?

b. Business cartels are the unique feature of oligopoly. Explain the nature and workingof cartels with the help of an example of OPEC as an international cartel.