Economic Questions

Moreover, to the commercial companies, advertising services from different broadcasting company are differentiated. That means the products are differentiated to the buyers.

(c) When MAC equals MR., the profit is maximized. From the above table, when output level is 140 minutes, marginal revenue equals marginal cost ($10000=$10000), so the profit-maximizing level of output is 140 minutes.

(d) When the industry exists positive economic profit, it will attract new firms to enter into the industry.

However, no more licenses will be offered by government, so no any new firm entering the industry.

(e)(I) Collusion is a formal or tacit agreement to limit competition by setting output quotas, fixed prices and limited promotion.

(e)(ii) Product differentiation means that each firm makes a product that is slightly different from the products of competing firms. A television broadcasting company could provide better quality or design of commercial advertisement to differentiate its product.

Question 2 (a)(I) GAP at current market price in 2012 (Expenditure approach): 00+120+130+90-80+100-90+1 10 ?$480 million GAP at current market price in 2012 (Income approach) 130+80+100+120+40+10 = $480 million Real GAP in 2012: 480/125 x 100 =$384 million I GAP per capita 384/0. 7 =$549 kaput (correct to O decimal place)

(c) The expenditure which does not vary with GAP is autonomous expenditure, such as the sum of investment, government purchases and exports. The expenditure which varies with real GAP is induced expenditure, such as consumption expenditure and imports.

(d) Expenditure multiplier of Country A: 1/(1-0. 3) . 43