![Ms-9 Question bank](/components/com_k2/images/placeholder/category.png)
Ms-9 Question bank (12)
Ms-9 Question bank
Ms-9 Dec 2009
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 Dec, 2009
MS-9 : Managerial economics
1. Distinguish between profit maximisation and value maximisation giving examples.
2 (a) Briefly explain the concept of price elasticity of demand giving suitable examples.
(b) What are the determinants of price elasticity ? Explain giving examples.
3. Write short notes on the following giving suitable examples :
a) Breakeven output level
b) Profit contribution analysis
(c) Operating leverage
4. Critically comment on the factors which determine the nature of competition giving suitable examples.
5 (a) Why will managers prefer to operate in a cartel type environment as opposed to
competition ? Explain.
(b) Sustaining collusion is difficult for firms. Explain why, with reference to the prisoners dilemma.
6.You are given to understand that the existing firm in a market drives 80% of its revenues from 20% of its customers. Your boss wants you to develop a strategy to enter this market to compete with the existing firm (incumbent). Your answer should focus on :
a)How you would target existing customers ?
b) How you would seek to attract new customers ?
c) It is possible that the incumbent will also change his strategy following your decision
to enter. How according to you will the incumbent react ?
d) What will be your counter strategy to combat the incumbent ?
7. What do you understand by 'laws of production ? Explain the production function with one variable input highlighting the law of diminishing marginal returns and the stages of production
Ms-9 Dec 2010
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 Dec, 2010
MS-9 : Managerial economics
1. (a) Discuss the relation between the average product, marginal product and total product in the short run.
(b) How do these support the application of the law of variable proportion to the firm ? Give example.
2. (a) Why is the long run average cost curve called an "envelope curve" ?
(b) Business Managers say that the firm plans in the long run and operates in the short run. Elucidate.
3. (a) Identify the differences between price elasticity and income elasticity. Illustrate with the help of examples.
(b) Discuss the determinants of price elasticity. Give examples.
4. Write notes on any four of the following :
(a) Opportunity cost
(b) Incremental concept
(c) Barriers to entry
(d) Effect of advertisement on demand of a product
(e) Delphi technique
5. Write five important characteristics of perfect competition. Establish the profit 20
maximising output of a perfectly competitive firm in the short run.
6. State True or False and give reasons :
(a) If total profit is at a maximum, marginal profit is zero.
(b) If a good is normal, then both the substitution effect and the income effect cause quantity demanded to change in the same direction.
(c) If price elasticity of demand for a firm's output becomes more elastic, then the firm's marginal revenue will increase.
(d) If the price elasticity of demand for a firm's output is inelastic then the firm could increase its revenue by reducing price.
(e) Economies of scale is a short run concept.
7.Case study questions
(a) What is the difference in a shift in the demand curve and a movement along the
demand curve ?
(b) Discuss factors which cause the demand curve to shift upwards ?
(d) Will "price" and "income" have a similar effect on demand of vegetables ?
Explain.
Ms-9 Dec 2011
Written by sales@mbaonlinepapers.com sales@mbaonlinepapers.comMS-9 Dec, 2011
MS-9 : Managerial economics
1. One of the most significant business and economic trends of the late twentieth century
is the rise of 'global' or 'stateless'. Corporation critically comment on the statement taking examples from the real world firms.
2. (a) Discuss the concept and features of monopolistic competition giving examples.
(b) Explain which of the following markets could be considered monopolistically competitive. Give reasons for your answer.
(i) Automobiles
(ii) Restaurants
3. (a) Explain the concept of economies of scale.
(b) What are economies of scope ? How do they differ from economies of scale ?
4. For a demand function
P = 200 — 50Q
or Q = 400 — 2P
Calculate the point price elasticities when
(a) P =20 and Q = 180
(b) P = 80 and Q = 120
and determine whether the demand is elastic or inelastic.
5. (a) Discuss the marketing approach to a Demand measurement.
(b) Outline the trend projection method of demand forecasting with the help of an
illustration.
6. Read the following case problem and answer the questions given at the end.
HIGHWAY BLUES
Ratan Sethi opened a petrol-pump cum retail store on Delhi- Agra Highway, about two-hour drive from Delhi. His store sells typical items needed by highway travellers like fast foods, cold drink, chocolates, hot coffee, children's toys etc. He charges higher price compared to the sellers in Delhi, yet he is able to maintain brisk sale-particularly of "Yours' Special Pack" (YSP) consisting of soft drink in a disposable plastic bottle and a packet of light snacks. The Highway travellers prefer to stop at his store because, while their cars wait for petrol-filling they in the meantime can enjoy Your's Special Pack (and, in some cases would help themselves with some other items in the store).
Each year he could substantially enhance his sales by providing Special Summer Price
on YSP which is almost half of its regular price. Last year while returning from Delhi, Ratan found that a new, big and modern grocery shop has come up 15 kms from Delhi on the National Highway. It has affected his sales but only marginally. But last month another large convenience store has opened just , 5 km. away from his store. He knows that the challenge has come meet to his doorsteps and he expects to be adversely affected by the existence of these two stores.
He needs to meet this challenges and decides to use the pricing strategy which he has been using quite effectively till recently. He now permanently reduces the price of YSP to half of its existing price. But at the end of the year Ratan finds that his sales in general and of YSP in particular had declined by 20 per cent.
(a) Where has Ratan sethi gone wrong ?
(b) If he was a managerial economist, how do you think he would have handled the situation ?
Q 7. Break - even production of a firm is 5,000 units, its fixed cost is Rs. 50,000; the variable cost per unit Rs. 25. Find out the price of the product. How much the firm should produce to earn profit of Rs. 25,000 ?