Task A – 20% of your final mark (LO1)
Answer two of the three questions below in 600 words or fewer using diagrams to illustrate your answers. Each question answered is worth 10% of your overall mark for the module.
- Show that a consumer’s utility maximising bundle equates the marginal rate of substitution to the ratio of the prices of goods (ignore corner solutions).
- Explain why firms in monopolistic competition make no economic profit in the long run.
- Show how monopsony may lead to increased employment after the introduction of a minimum wage.
This task is intended to assess your knowledge of conventional microeconomic principles (part of LO1). The word count is deliberately tight in order to force you to prioritise the most important arguments/explanations in your answers. Providing clear and concise explanations of the most important aspects will lead to good marks. Your answers should be written in an academic style.
Diagrams are essential. It is impossible to produce a good answer to these questions without using a well-chosen, and well-drawn, diagram. Do not simply present a diagram without carefully explaining it in the text. Use diagrams to save words and explain them to illustrate your answer.
Task B – 80% of your final mark
(Selected company Astro)
Select a public limited company of your choice which has some degree of market power. In an essay of 2400 words or fewer, evaluate the pricing strategies it employs for its core product/business in order to increase its market share and profitability within its industry (at the national level).
(NOTE: THE COMPANY SELECTED HERE IS ASTRO COMPANY A MALAYSIAN MEDIA AND ENTERTAINMENT HOLDING COMPANY.)
Task B must be written as an essay. You will need to build up a case study based on a company of your choice. You must first demonstrate that the company has some power to set its own price (that is, it has some degree of market power) – e.g. what is the structure of the industry it operates in? What is its market share for the product? How concentrated is the industry?
You must then use economic analysis to evaluate the pricing strategies your firm has adopted for its main product(s). Make clear comparisons between the predictions of the economic theories covered in the module and the empirical evidence for your firm. Are the strategies adopted by the firm optimal? If so, why? If not, why not? How might they be improved?
Hard copy assignments (Associate College partners)
This assignment is submitted via hard copy at office/location at your college. Academic staff CANNOT accept work directly from you. If you decide to submit your work by post, it must arrive by midday on the due date. If you elect to post your work, you do so at your own risk and you must ensure that sufficient time is provided for your work to arrive. Posting your work the day before a deadline, albeit by first class post, is extremely risky and not advised.
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