Question: 1 What is opportunity cost? Explain with the help of an example, why assumption of constant opportunity cost is very unrealistic?
Question 2. (a) Explain law of demand with the help of a demand schedule and demand curve.
(b) Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
Question 3. "Cost function expresses the relationship between the cost and its determinants." Discuss this statement giving examples from any firm of your choice.
Question 4. "A characteristic of oligopolistic market is that, once the general price level is established it tends to remain fixed for an extended period of time." Discuss the economic rationale underlying this phenomenon.
Question 5. In any firm of your choice, try to find the effect of change in demand and change in supply on price and quantity of product.
Question 6. Write Short Notes on the following:
(a) Value Maximization
(b) Envelope Curve
(c) Peak Load Pricing