SECTION “B”
Answer the below questions. Each question carry 20 marks.
1)
Answer the following:
a.
Discuss briefly the supply schedule and the various factors affecting the supply in the market.
b.
Assume the demand being perfectly inelastic, and supply suddenly doubles due to innovative technique of production. Illustrate in a well labelled graph, the changes in the equilibrium price, and quantity, and also is it advisable to do so from supplier point of view.
2)
The Telecommunications Regulatory Authority (TRA) is the UAE’s independent industry regulator. Since its launch in 1976, Etisalat has held a monopoly in the market. That changed in 2006 with the emergence of du, which was awarded a 20-year concession to operate fixed-line, wireless, internet and international telecoms services. UAE-based telecom operator recently announced that it was launching Virgin Mobile as a new telecom brand within the country. Assuming the trend continues and the government opens the market for more private and foreign players. You are required to –
a.
Apply your understanding and concepts from microeconomics, to investigate and summarize the major characteristics of the emerging market form in the telecom industry.
b.
Describe and analyze the pricing policies that you would expect to find in this industry.
c.
Explain the profit maximization strategy of this market form with the help of a suitable graph.
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