Microeconomics Questions

Number of Words : 2331

Number of References : 13

Assignment Key : E-20034

Contents

  • Content for this assignmentThis paper answers the following questions -
  • Content for this assignmentQuestion 1:
  • Content for this assignmentThe 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–
  • Content for this assignment Apply your understanding and concepts from microeconomics, to investigate and summarize the major characteristics of the emerging market form in the telecomindustry.
  • Content for this assignment Describe and analyze the pricing policies that you would expect to find in thisindustry.
  • Content for this assignment Explain the profit maximization strategy of this market form with the help of a suitable graph.
  • Content for this assignmentQuestion 2:
  • Content for this assignmentCase Study - Some of the largest economic fluctuations in the U.S. economy since 1970 have originated in the oil fields of the Middle East. Crude oil is a key input into the production of many goods and services, and much of the world’s oil comes from Saudi Arabia, Kuwait and other Middle Eastern countries. When some event (usually political in origin) reduces the supply of crude oil flowing from this region, the price of oil rises around the world. U.S. firms that produce gasoline, tires, and many other products experience rising costs, and they find it less profitable to supply their output of goods and services at any given price level. The first episode of this sort occurred in the mid-1970s. The countries with large oil reserves got together as members of OPEC (the Organization of Petroleum Exporting Countries). OPEC reduced production and oil approximately doubled in price from 1973 to 1975.
  • Content for this assignmentAlmost the same thing happened a few years later. In the late 1970s, the OPEC countries again restricted the supply of oil to raise the price. From 1978 to 1981, the price of oil more than doubled. In 1986, squabbling broke out among members of OPEC. Member countries reneged on their agreements to restrict oil production. In the world market for crude oil, prices fell by a half. This fall in oil prices reduced costs to U.S. firms. In recent years, the world market for oil has not been as important a source of economic fluctuations. Part of the reason is that conservation efforts and changes in technology have reduced the economy’s dependence on oil.
  • Content for this assignmenta. Explain the short-run and long-run impacts of oil price increase on output and price level in the U.S. during 1973-1975 periods using the model of demand and supply.
  • Content for this assignmentb. Explain the short-run and long-run impacts of oil price fall on output and price levels in the U.S. in 1986, using the model of demand and supply.

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