Economic Analysis for Business Decisions (103)

Assignment no -3 (Solve Numerical)

Due date for submission - 26/03/2022
1) From the following table, calculate price elasticity of demand by the percentage-change
method.

Price of X (Rs per unit) Total Expenditure (Rs)

4 600

5 525

2) Calculate the following using total outlay method of price elasticity of demand also mention
the relationship between them (eg : elastic demand, unitary elastic demand and, inelastic
demand)

Price Demand Total outlay Relationship

10 120 P*D =1200 Original state

Price Demand Total outlay Calculation Relationship

15 600
30 300

Price Demand Total outlay Calculation Relationship

15 500
30 1000

Price Demand Total outlay Calculation Relationship

15 2000
30 750

3) Price of commodity is 50rs per unit and quantity supplies at this price is 750 units. If price
increased from 50rs to 70rs per unit and due to increase in price the quantity supplied has also
increased from 750 to 1230 units find out the elasticity of supply.
4) Mr. Rahall’s cost of running the business are as follows,

Raw material – 1, 25, 000rs

Wages – 60,000rs

Administrative expenditure – 5000rs

Transportation – 10,000rs

Mr. Rahall is running his business in his own building and if he could rent out his building, the
rent of his building would be rs 95000/ per month. Then find out the accounting cost and
economic cost.

5) Calculate total cost (tc), Average fixed cost (AFC), Average variable cost (AVC), Average
cost (AC), Marginal cost (MC) from the following data.

Unit of output Total fixed cost Total variable cost

0 45 0
1 45 20
2 45 26
3 45 38
4 45 50
5 45 61
6 45 73

7) Given below is different price and quantity of units sold. Find Total revenue, Average revenue
and Marginal revenue using the give below data.

No. of units sold Price

10 23
20 23
30 23
40 23
50 23

8) Total fixed cost rs – 10, 00,000

Variable cost per unit rs - 400

Selling price per unit - 600

Desired profit – 4, 00,000

 Calculate the break-even point.

9) From the given data calculate

a) Average propensity to invest

b) Marginal propensity to invest

Old Income = 80,000rs

New Income = 1, 30,000 rs

Investment is 50,000rs

New investment = 1,00,000rs

10) If the selling price of capital asset is 40000 and annual yield for the current year is 5000rs.
Find out the marginal efficiency of capital (MEC).

Solve the assignment on full scape paper color scan the

document and submit it in the Google classroom before the due
date.