Project

PROGRAMME Master of Business Administration

MODULE Managerial Economics

YEAR One (1)

INTAKE July 2023

TOTAL MARKS 100 marks

This project contains a series of tasks that will test your application and critical thinking skills in managerial economics. It is
centred around the general theme of market structures and firm theory. South Africa’s economy is comprised of several different
market structures, and these have different implications for welfare, development, employment, competition and economic
growth. Several of the questions require you to reflect on these implications as part of your responses.

Please answer all questions.

FORMATIVE ASSESSMENT 2 [100 MARKS]

QUESTION 1 (20 Marks)

1.1 Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs of (10 Marks)
production. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is
R300,000. Identify the type of this production function and Illustrate it with a 2D graph.

1.2 If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for
smartphones, compute the number of phones that would be bought and sold at equilibrium. (10 Marks)

QUESTION 2 (20 Marks)

South African electricity generation is dominated by a monopoly, ESKOM. Develop an economic intervention plan with
measurable outcomes to permanently stop load shedding. Your plan should highlight its benefits and its consequences
(intended and unintended) for the micro and macro economy. It should run for a period of two years.

QUESTION 3 (20 Marks)

In recent years, the price of internet data has led to widespread anger in South Africa.

Devise a strategy to address the different challenges posed by the market structure in the telecommunication sector with a view
to bringing data prices down to lower levels than present and while creating jobs. The trade-offs inherent in your strategy must
also be highlighted.
QUESTION 4 (20 Marks)
The table contains various costs of production that pertain to Mzanzi-Ndizvo (Pty).
Complete the table below for the missing information using the necessary cost formulas..

Q TFC TVC TC AFC AVC ATC MC

0 0 60

1 20

2 30

3 45

4 80

5 135

QUESTION 5 (20 Marks)

Synthesize the latest findings/ results from the literature on firms and imperfect competition. Limit the task to the years 2020
to 2022.

END