Write 2 pages thesis on the topic last healthcare using excel. Fundamentals of microeconomics al Affiliation) Question one Market A market refers to a medium that allows buyers and sellers of a particular good or service to interact in order to enhance an exchange process. Various issues may determine the price that the customers pay at the time of transaction, though price is majorly determined by the principles of demand and supply (Zubair & Habibah, 2011).
The market equilibrium refers to the situation in which the quantity of products and services is equal to the products and services supplied. This principle makes the price to become more stable. When there is high supply of goods and services, the price decreases resulting in a higher demand.
Preparation of a schedule and drawings of demand and supply curves
Price (X) in dollars
Price (X) in dollars
The price and output level at the point of equilibrium in the market
At equilibrium, the quantity demanded is equal to the quantity supplied (Zubair & Habibah, 2011).
Therefore, Qd = Qs, meaning that 100-6P= 28+3P
-6P-3P = 28- 100
-9P = – 72
P = 8 dollars
The Qd = 100 – (6*8)Qs = 28 + (3*8)
Q = 52 unitsQ = 52 units
At equilibrium: The price level = 8 dollars
The quantity level = 52 units
a) Equilibrium price=$30, price where quantity of barrels demanded equals the quantity supplied.
b) Total revenue(TR)=q*p
TR= (50, 000000*40)
c) TR=Quantity supplied*price
The total revenue (TR) will increase i.e. from $2 billion to $2.5 billion.
d) Elasticity of demand is a ration used to show the understanding of price in terms of ratio in quantity demanded to price:
Price Elasticity of demand is the ratio of quantity demanded to the price in form of percentage (Zubair & Habibah, 2011).
Change in Qd = 30 – 40
= – 10
% change = -10 * 100%
= – 10 %
Change in price = 40 – 30
The change in % = 10 * 100%
= 10 %
= (- 10 / 10)
Therefore, the price elasticity of demand is equal to – 1 unit.
Price elasticity of supply
The price elasticity of demand refers to the ratio of the quantity supplied to the price in form of percentage.
The change in the Qs = 50 – 40
= 10 units
The % change in supply = 10 * 100%
The change in the price = 40 – 30
= 10 dollars
The % change in price = 10 * 100 %
= 10 %
The price elasticity is illustrated as (10/10) %
The result that indicates the price elasticity is equal to 1 unit.
The law of diminishing marginal utility
The law of diminishing marginal utility refers to the state that when an individual increases the consumption of a commodity and at the same time keeping the consumption of other products constant, there is a decrease in the in the marginal utility that the individual originates from consuming each extra unit of that commodity (Zubair & Habibah, 2011).
The formula for calculating the marginal utility is equal to change in the total utility over the change in the number of units consumed by an individual.
Units consumed of goods A
a. The marginal unit of consuming three units of good A is equal 10units.
b. The level of consumption at the point where the marginal utility is zero is equal to consumption of five units of good A.
c. The level of consumption at which the total utility will reach at maximum is the point where the individual will consume five units of good A.
d. The point at which the level of consumption where the marginal utility becomes negative is the point where an individual consume six units of good A
The consumer surplus refers to the economic measure of a consumer satisfaction that is calculated by evaluating the difference between what the consumers are ready and able to pay for a good or service virtual to its market price (Zubair & Habibah, 2011). The case of a consumer surplus will probably occur when the consumer is ready and able to pay more for a given product or service than the current market price.
The producer surplus refers to the economic measure of the difference between the value that a producer of a commodity receives and the least amount that the individual would be willing and able to accept for the commodity (Zubair & Habibah, 2011). Therefore, the surplus or difference is the benefit that the producer receives for selling the commodity in the market.
Law of supply
The law of supply states that, ceteris paribus, (all factors kept constant), the price and quantity supplied of goods and services are directly proportional to each other.
How the following factors will shift the supply curve
a. Number of producers increasing in the market
When the number of producers increase in a market, the supply will automatically decline due to the excess suppliers who are will and able to supply goods and services. The price of supply will also fall.
b. Advancement in electronic technology
Advancement in technology will create a rise in supply because relevant information on where to supply next will be easy to know. An increase in technology leads to an increase in supply. This is a non-price factor.
c. Increase of prices of raw materials
An increase in the cost of raw material will automatically increase the price of production. The selling price and the supply will also increase.
d. Expectation of increase in oil prices during next month
The expectation of future increase of oil will increase the quantity demanded making the supply and the prices to rise (Zubair & Habibah, 2011).
Zubair Hasan., & Habibah Lehar.,. (2011). Fundamentals of microeconomics. Oxford: Oxford University Press.