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A., , OBJE, Define the following concepts, 1., , Business Economics, , 2. Opportunity Cost, 3., , Function, , 4. Equation (Nov. 2016), 5. Average revenue (Nov. 2016), 6., , Marginal revenue, , 7. Total revenue

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17, , Introduction to Business Economics, , B., , Fill in the blanks:, , refers to the integration of economic theory with business, , 2., , practice., , Businesseconomies is now termedas, .Demand analysis and forecasting is essential foris narrower in scope than cost, analysis., 5., deals with various aspects of, supply of a commodity., 6. As price generate income to the, firm,, are important for business economics., 7. The, price determination theories in different market conditions enable the firm, solvethe, problems., 8. The scope of business, economics cover all major aspects of, analysis., 9, enables the manger to become a more competent model builder., 10., refers to the next best alternative, foregone or sacrificed., 11. The change in total cost, resulting from a particular decision of the firm is refer, 12. The, , measures, , the, , change, , in the, , change in the independent variable., 13., , refers to, , statement of, is the per unit value., , 4., , C., , a, , dependent, , variable with respect, , to, , as, , to the, , equality of two expression or economic variables., , Ans. (1) Business economics; (2), Managerial economics; (3) business planning;, (4) Production analysis; (5), Supply analysis; (6) pricing practices; (7) pice fixation;, (8) micro-economic; (9) Business, economics; (10) Opportunity cost; (11) Incremental, cost; (12) marginal concept; (13) Equations; (14), Averages], Multiple choice questions:, 1., , i s the economics of business, a) Micro economics, , c)Indian economy, analysis helps, , b), d), , identity, , to, , product., , a) Supply, , c)Production, cover, , topics such, , as, , a) Production analysis, , c)Costanalysis, is, , 6., , Macro economics, Business economics, , the various, , factors, , the demand fora, , costs etc., , concerned with planning and control of capital expenditure., b), d), , c)Market management, opportunity, , cost is also, , called, , as, , Profit management, None of these, , COst., , ., , a) Total, , b), , c)Marginal, , Average, , d), , Alternative, , Incremental, a), , influencing, , b) Demand, d) Cost, cost concepts, methods of, estimating, b) Supply analysis, d) Demand analysis, , a) Capital management, 5., , managerial decisions., , or, , principle, , state, , that,, , a, , investment decision is, , revenue increase more than costs, , b) cost reduce more than revenue, c)both (a) and (b), d) None of these, , profitable if

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Business Economics (F.Y.B.Com,) (Sem, Sem., , 18, , 7., , a), , Marginal revenue, , b), , Marginal cost, , c), , Average revenue, , d), , Average cost, , Functional relation, c) Both (a) and (b), , 9., , The, , sum, , of the, , b), d), , dependent variable is, , Equations, these, , None of, , -, , a), , Total, , c), , Marginal, , a), , involves a cost-benefit comparison of various business activities., Cost analysis, b) Production analysis, , 10, , b), d), , c) Demand analysis, [Ans. (1 d), (2 b), (3 -c), (4 -a), (5, -, , -, , Average, None of these, , d, Marginal analysis, d), (6 c), (7 a), (8- a), (9, -, , -, , -, , a),, , (10-d)], , Match the columns:, ., , Group 'A', , Group 'B', , |1. Opportunity cost principle, , a), , Changes in total cost and revenue, , 2., , Business economics, , b), , Marginal revenue and cost, , 3., , Incremental concept, , c), , Managerial economics, , 4., , Marginal concept, , d), , Sacrifices involved, , [Ans.(1-d), (2, , c), (3, , II., , Group 'A', , a), (4 - b)], , Group 'B, , 1. Functional relations, 2. Equations, , a), , Equality of two expressions, , b), , per unit value, , 3., , Total, , c), , denoted by letter 'f, , 4., , Average, , d), , sum, , of, , [Ans. (1- c), (2 - a), (3 - d), (4 - b)], , State whether the, 2., , Business economics is the economics of, , 3., , Business economics is applicable, There is no uniform pattern as, , 5., , Cost, , 6., , Market, , 7., , analysis, , dependent variable, , following statements are true or false, , Business economics does not involve decision, 4., , to, , several, , regards, , is more, , to, , making process., , business., area, , of, , business., business economics., , the scope of, , signiticant than production, analysis., , management, any business, Capital mangement implies planning of capital economics., is crucial for, , expenditure., analysis is narrower in scope than production, analysis., 9. Opportunity cost require ascertainment of, sacrifices., 10. Incremental concept is closely related to, the cost, 8., , (Pan-, , explains the dependence of one variable on the other variable., , a), , E., , ), , The ratio of change in total revenue to a unit change in output sold is, , B., , D., , -, , Cost, , only,

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ntroduction to Business Economics, , 19, , 11., , Equation expresses two expression, , 12., , Functional relationship, , is, , or, , denoted by, , variables., symbol 'P'., , 13. Total is the per unit value., 14., , Many economic decisions depend, , on, , marginal analysis., , 15. An exogenous variable is within an economic model., 16. Opportunity costs arise because resources are unlimited., , Ans. True: 2, 3, 4,5, 6, 7, 9, 11, 14, , ;, , False: 1,8, 10, 12, 13,15, 16]

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Market Demand and Supply, 29, , MODEL QUESTIONS, 1., , Explain market demand curve with the help of market demand schedule., , 2., , Explain market supply curve with the help of market supply schedule., , 3., , With the help of a diagram explain the determination of equilibrium market price and, , quantity., , (March 2018, March 2017), , 3., , OR, Explain the determination of equilibrium price using the concepts of market demand, and market supply., (March 2019), , 4., , "The equilibrium price will change wherever there is a change in demand or supply or, both". Explain., , 5., 6., , Explain, Using, , the basics of market, , diagrams explain the, , demand, market supply and equilibrium price., causes, , of, , and shifts in the demand curve., 7., , 8., , 9., , changes, , in, , demand in terms of, , movement along, (Nov. 2017), , Using diagrams explain changes in market equilibrium due to changes in demand., (March 2018), (Nov. 2016), , Using diagrams explain changes in equilibrium due to:, ), , Increase in demand, , ii), , Increase in supply, , Explain changes in equilibrium dueto, a) Changes in demand and, b) Changes in supply, , (Nov. 2017), , 10. Write short notes on, a) Market demand, b) Market supply, , c)Equilibrium price determination, d) Shifts in the demand and supply curves and equilibrium., , 11. Distinguish between Market demand and Marketsupply., 12. Given the following data for supply and demand for pizzas, Price R) Per pizza, , (Nov. 2016), , Quantity Demanded, , Quantity Supplied, , (pizzas per week), , (pizzas per week), 40, , 8, 6, , 10, , 30, , 4, , 20, , 20, , 2, , 30, , 10, , 0, , 40, , 0, , Identifythe: a) equilibrium price, b) equilibrium quantity demanded and supplied, , Solution, a), , Equilibrium price = { 4 per pizza, , b) Equilibrium quantity demanded and supplied, , 20 pizzas per week

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Bsiruss rums ( 1 7 B o n . ) (em, The, , lable, , bolow shows, , hypothtical, , Quantity demander, , Prico, , (), , (Paper-,, , dernand chedules for 1-Shirts,, Juantity denanded, , Quantity dernandoy, , QDX2, , QDX;, , QDX, , 2, , 20, , 15, 10, 10, , 5, , i), , 12, , 4, , A, , (Mar., 2017), , Calculate market demand., , Solution, Price, , (), , Market Demand, , QDX, , +, , +, , QDX3, , 0+2+3 =5, , 20, 15, , 1+2 +5 8, , 10, , 2+2+B8 = 12, , 5, , 3, , 14., , QDX2, , 3 +3+ 10, , 16, , 4+4+ 12 2 0, , schedules of wheat., Using the following hypothetical supply, Quantity Supplied, Price ) Per kg, , by seller A, , by seller B, , 10, , 15, , 4, , 9, , 10, , 3, , 8, , 5, 3, , 2, , 2, , 1, 1., , Quantity Supplied, , Calculate the market supply., , Solution, Price, , Market Supply, , per kg), , Seller A + Seller B, , 10+15 25, 4, , 3, 2, , 9+10= 19, 8 +5, , 13, , 7 +3 = 10, , 6+2 0 8

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Market Demand and Supply, 31, , A., , Define the, 1., , OBJECTIVE QUESTIONS, following concepts:, , Demand, , 2. Supply, , 3. Equilibrium price, , (Nov. 2016), , 4. Market demand, , 5. Individual supply, B., , Fill in the blanks, 1., , 2., , refers, , to, , the total, , demand for a commodity, The market demand schedule shows an, , by all buyer, , demand., , 3. The, , in the market., , relationship between price and, , market demand curve slopes, refers, , to, , the total, , quantities of commodity offered for sale by all, , in, , producers., , 5. When the market schedule is plotted on a graph we get, Curve., 6. The market supply curve, to the, right., slopes, 7. The, is determined by the interaction of market demand and, supply., 8. The point at which quantity demand equals to supply is the, 9., , With, , 10., , Shift in the supply, , an, , increase in, , 11. Shift in the, , supply,, , curve to, , demand, , remaining unchanged,, , the left will, , the, , equilibrium price, , the equilibrium price., , supply curve to the, , left will increase the, [Ans. (1) Market demand; (2) inverse; (3) downward; (4) market supply; (5) market, Supply: (6) upwards; (7) market price; (8) equilibrium point; (9) falls; (10) increase;, , (11) equilibrium pricel, , C., , Multiple choice questions:, , A. The market demand curve slopes, a) downward, b) upward, , from left to right., , c)horizontal, , d) vertical, , relationship between price and quantity, , 2. The market supply schedule shows, , supplied., b), , a) inverse, B., , direct, , d) none of these, , c)no, , The point at which the quantity demanded equals supplied is the, , b)total demand c) equilibrium point, d) none of these, a) total supply, 4. A case of increase in demand, supply remaining unchanged, the equilibrium price, a), , b) falls, , rises, , c), , constant, , d) none of these, , A case of decrease in supply, demand remaining unchanged, the equilibrium price, b), , a) falls, ., , As price, , .,, , a) decreases, 7. Market, a), , demand, , rises, , quantity demanded, b)increases, , is derived, , c) constant, decreases and, , d) None of these, , quantity supplies, , increases., , c)remain constant d) None of these, , by adding up all the individual demand., , b) supply, , c) price, , d) none of these

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Business Economics (F.Y.B.Com.) (Sem. -, , ), , (Paper, , 32, , 8., , between the price of, following shows the relationship, amount of the good that consumers want at that price, , Which of the, , Supply curve, , b), , Demand curve, , c)Supplyschedule, , d), , Production, , a), , 9., , (Nov. 2016), , current price, , b), , prevailing price, , c)equilibrium price, , d), , None, , TAns. (1- a), (2 b), (3, Match the columns, -, , -, , c), (4, , a), (5- b), (6, , -, , of the above, , b), (7, , -, , a), (8, , -, , b), (9, , -, , c)], , Group 'B, , Group 'A', , I., , good and the, (Nov. 2016), , frontier, , The market clearing price is also called the., a), , D., , possibilities, , a, , 1., , Market demand curve, , a), , demand = supply, , 2., , Market supply curve, , b), , downward sloping, , 3., , Equilibrium point, , c), , upward sloping, , [Ans. (1- b), (2 - c), (3 - a)], , E., , State whether the, , following statements are true or false:, , direct relationship between price and, , 1., , The market demand schedule shows, , 2., , quantity demanded., The market supply curve slopes upwards to the right., , a, , in income only., equilibrium price will change wherever there is a change, falls., A With decrease in demand, supply remaining unchanged, the equilibrium price, the equilibrium price, 5. With an increase in supply, demand remaining unchanged,, 3., , The, , rises., Shift in the supply curve to the left will increase the equilibrium price., the left will increase the equilibrium price., 7. Shift in the demand curve to, False: 1, 3, 5, 71, [Ans. True: 2, 4, 6

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MODEL QUESTIONS, 1., , What is demand function? State and graphically explain the relationship between price, , and quantity demanded., 2., , Explain the derivation of a demand curve, with the help of a demand equation for price, , 3., , Explain the nature of demand curve under different markets., , 4., , a) Explain the nature of demand curves of firms in perfect competition and oligopoly, (Nov. 2016), markets., , (March 2018), , b) Using diagrams explain the difference in demand curves of firms in perfect, , (March 2017), , competition and monopoly., , c) Describe the nature of demand curve under perfect competition and monopolistiC, , (Nov. 2018), , Competition., , d) Describe the nature of demand curve under monopoly and oligopoly. (March 2019), 5., , Explain the demand function with the help of various determinants of demand., , 6., , State and explain the determinants of demand./What are determinants of demand., (Nov. 2017), , AWhat are the determinants of demand other than the price of the good itself?(Nov. 2016), 8., , Write short notes on:, a) Demand Function, , b) Determinants of Demand, , c)Nature of demand curve under different markets., 9., , Explain the Law of Demand and what are the exceptions to it., OR, , 99., , State and explain the law of demand. Write the, of demand., , 4/F.Y.B.Com.-Business Economics (Sem.-1) (Paper-1), , assumptions, , and, , exceptions, , to, , the lawv, , (Nov. 2018)

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Business, , 42, Explain, , the law of demand, , the basis of various, , on, , 11. Calculate thefollowing:, , =65,000, , Qox, , F, , following table, , Py, , =, , Py =R6, Qox, Px, Px, , When, When, , =, , =, , (March 2019), shoes., , sports, , =, , 65,000 -, , =65,000 60,000, , 10,000(6), , 5,000, , =, , 50,000, , =, , 15,000, , 5, QDy= 65,000, , 65,000 -, , 40,000, , 25,000, , 65,000, , =, , 65,000, , =, , 10,000(4), , Qp, , Complete th., , (Nov. 2016), , =, , 4,, , =, , )(raper ), , -)Pape, , demand., , of, , 10,000(5), , -, , 35,000, , 65,000 30,000, When Py 3, Qp 65,000, 40 0.1P and its supplu, as Qd, is, giveri, The demand function for a commodity, of demand and supplya, a schedule, Make, 0.2P., 20, function is given as Q, =, Find the equilibrium price an, =, , 10,000(3), , =, , =, , =, , -, , =, , b), , (5em,, , 6,5,4,3. Show your working., , Solution, When, , (. Y.B,(Com.), , determinants, , for, describes demand, , Px, , 10,000, , lconomics, , -, , 400/., , and, 100/-, 7 200/-, 7 300/-,, , prices, , (Nov. 2018), , quantity., Solution, , Price ), , 20 0 . 2 (100) = 0, , 100, , 40- 0.1 (100), , =, , 30, , 0.1 (200), , =, , 20, , 40, , 200, , 20 0.2 (200), , 40, , 400, , Equilibrium price, , is 7 200 and, , 0.1 (400), , c)The demand, function is given, , as, , Qs, , =, , 120/,, , 100/,, , commodity, , a, , 20 0 . 2 (400) = 60, , 0, , equilibrium quantity is, , is equal to quantity supplied)., function for, , =, , 20, , 20 0 . 2 (300) = 40, , 40- 0.1 (300) = 10, , 300, , T 80/,, , Quantity supplied (Qs), , Quantity demanded (Qd), , 20 units, , (quantity demanded, , 2P and, , is given as Qd 600, schedule of demand and, =, , 3P. Make a, the, T 140/- and 7 160/-, Find, , its supply, , supply at prices, equilibrium price and, (March 2019), , quantity., Solution, Quantity demanded (Qd), , Price ), , (86) = 440, , 3 (80) 240, , (100) = 4000, , 3 (100) =300, , 600-2 (120) = 360, , 3 (120)=360, , 600-2 (140) = 320, , 3 (140) = 420, , 280, , 3 (160)= 480, , 600 2, , 80, , 600 2, , 100, , 120, 140, , 600 2 (160), , 160, , Quantity supplied (Qs), , Equilibrium price { 120, Equilibrium quantity= 360, =, , units, , (where quantity demanded is, , supplied), d) Qx 120, , 1.5 Px + 4A, Estimate demand when Px = 7 30 and A = 7 20,000., , e), , Qd, , 100-5P, Find the quantity demanded for, , equal to quantity, Ans.: 80,0751, , price ofR 2, 4,, , 6 and 8., , Ans.: 90, 80, 70,60

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Demand Function, , 43, , From the given demand function Qx 100 20 Px, price being in rupees derive the, individuals demand schedule and demand curve., IAssume price 0 to 5], =, , g, , For the linear demánd curve Q, , P, , 20 and, , =, , 100, , 5 P, What is the total expenditure at, , 10., , Ans.:0, 7 50], , h) For the demand equation, i)What is the, , Q 90 3P,, quantity demanded for price of ?, , ii), , =, , 8., , Ans.: 66], , What price one would be willing to pay if the quantity demanded 60., Ans.: 10, , A., , OBJECTIVE QUESTIONS, Define the following concepts:, 1., , Demand, , 2. Demand Function, 3. Demand Curve, B., , Fill in the blanks, , straight line demand curve implies, , 1., , A, , 2., , Dx, , =, , a, , -, , b Px is, , 3. Demand and, 4., , The demand, , a case, , of, , price have, curve, , is, , demand function., , demand function., , relationship., elastic., , explains the relationship between demand for a commodity and it, , 5, , determinants., 6. The demand curve for a perfectly competitive firm is, , 7. The monopoly firm faces a, 8. An, , demand curve., , firm does not face a definite demand curve., , [Ans. (1) Linear; (2) Linear; (3) inverse; (4) perfectly; (5) Demand function; (6) perfectly, elastic; (7) downward sloping; (8) Oligopolyl, C., , Multiple choice questions:, , 1. The demand curve representing a conventional demand function refers to, a) Price-demand functional relationship, , b) Proportionate relationship between price charge and demand variation, c)Straight relationship between price charge and demand variation, d) Effective desire ofthe buyers., 2. Which of the following is a case of linear demand function?, a), , Dx = f(Px), , c)Dx = a +b Px +L, , f(Px, Py), , b), , Dx, , d), , Dx = 100-5 Px, , =, , 3. A linear demand function is.depicted through, b) a downward slopping demand curve, a) a straight line demand curve, d) none of the above, c ) a vertical demand curve, AAll of the following are determinants of demand except, b) Price of related goods, a) Consumer income, , c) Quantity supplied, , d) Size of population

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Busiess, , 44, , (5em,, , (I.Y.B.Com.), , Iconoms, , -, , ) (Pane., , aper-, , ., quantity, with price, inversely, Varies, b), with price, a)Varies directly with price, proportionately, d)Various, d), demandeed, , In, , S., , schedule, typical demand, , a, , c)Is independent of price, , demand, , Aperfect competitive firm facesa, d), , c)vertical straightline, The demand, , 7., , curve, , under, , a)upwardsloping, , monopoly, , is, , a, , curve., ., , b), , downward sloping, , above, None of the, d), c) horizontal straight, is, the demand curve, elastic,, demand, When, is perfectly, line, vertical straight, b), line, a) horizontal straight, above, d) None of the, , 8., , line, , c) Steepp, , is the desire for, pay its price., , 9., , a), , a, , is, commodity which, , horizontal, , c)upward sloping, TAns. (1-a), (2, , d), (3, , -, , b) vertical, d) Kinked (Indeterminate), (9- a), (10- d)], b), (6- d), (7 b), (8 a),, -, , a), (4- c), (5, , -, , -, , -, , Match the columns:, , Group 'B, , Group 'A, 1., , Demand function, , 2., , Perfect competition, , 3., , Monopoly, , 4., , Oligopoly, , Ans., , (1, , a), , Indeterminate demand, , curve, , -, , c), , Horizontal demand curve, , d) Dx =f(Px, Y, Pr, T ..), , Pefect competition, , 2. Monopoly, , Group B', , Demand curve, , [Ans. (1 c), (2, , d), (3, , -, , a), , Few seller, , b), , Downward sloping Curve, , c)Large number of buyers and sellers, , 3. Oligopoly, 4, , sloping demand, , Downward, , Group 'A', , 1., , curve, , d), (2- c), 3- b), (4-a)], , II., , E., , willingness t, , d e m a n d curve., , 0. Under oligopoly the firm faces a., a), , and, , Supply function, , d, , function, , by ability, , backed, , Supply, , b), , Demand, , Demand, , D., , lownward sloping, line, horizontal straight, , b), , a)upward sloping, , for its product., , curve, , -, , d)Single seller, , a), (4 -b)], , State whether the following statements are true or false:, and demand., Demand function explains the functional relationship between price, demand behaviour., 2./A linear demand function implies proportionate, Demand for, , ., 4., , a, , commodity depends only on price,, , income of the commodity., , A linear demand function may be stated as D = a - bP., , 5. The demand curve for a perfectly competitive firm is perfectly elastic., 6. A monopoly firm faces a upward sloping demand curve.

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Demand Function, , 7., , demand, , 8., 9., , 45, , The demand curve, under, curve, , monopolistic competition, , under, , monopoly., Demand varies directly with, price., , The demand, , curve, , for, , is more elastic in, , firm is indeterminate., oligopoly, 10. In a homogeneous, the firm try to differentiate, oligopoly, other competitors., 11. The, , monopoly firm, , comparison, , to, , an, , faces, [Ans.True: 1, 4, 5, 7, 9, 11, , a, , their, , downward sloping demand curve., False:2, 3, 6, 8, 10), 's, , products, , from the

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MODEL QUESTIONS, , 1., , Explain, , 2., , Explain the, , the concept, , of elasticity, , of demana., , (Nov. 2016, significance of elasticity of demand., with the help of diagrams., Explain the various degree of price elasticity of demand, demand., (Nov. 2013, Explain the various degree of income elasticity of, , 4., , 5., 6., 8, , 9., , concept and, , Explain the concept of cross elasticity of demand., Explain the promotional elasticity of demand., Explain the various factors affecting elasticity of demand., Discuss the various methods of measuring elasticity of demand., Explain the relationship between elasticity of demand and, , average, , revenue and, , marginal revenue., , OR, 9., 9., , Explain, , the, , relationship between elasticity, , of demand and, , revenue, , concepts (TR, A, , and MR)., , 10. With the, , help, , each other., , of, , diagram, explain, , how, , AR, MR and elasticity of demand, , (March 2019, are, , related, , t

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Elasticity o f D e m a n d, , the varius degrees, 11. Explainn the, , of, , 65, , elasticity of, , demand., significance of the concept, of, , 12, Write aa note, the significanco, note on the, , price, , 13., , (March 2017), , elasticity of demand., , Write short notes, a) Cross Elasticity of Demand, b), , (March 2018), , Promotional Elasticity of Demand, , (March 2019), , Significance of Elasticity of Demand, , (Nov. 2018), , dMeasurement of elasticity of demand., , Relationship between price elasticity and total revenue, , (Nov. 2016), , Income and cross elasticity of demand, 14., , o)Geometrical measurement of price elasticity of demand, , (March 2017), , (Define with formula, , (March 2018), , What is the ditterence between price, elasticity, income elasticity and cross elasticity, of demand? ls the demand for, angel, chocolates price elastic or inelastic it it, is = -0.2?, all the three, , elasticity, Demand for Angel chocolates is price inelastic), 15. Calculate the following:, , of demand and, , highlight differences., , a) When price is, 5 quantity demanded is 10 units. When price increase to, quantity demanded is 5 units, , i) Calculate price elasticity of demand. Is demand elastic or inelastic?, , 7, , (March 2017), , Solution, Old, , price (P) =75, , Old Quantity (Q) = 10, , New Price (P1) = T 7, , Ep A, , New Quantity (Q1) = 5, , *i20-125, , The demand is elastic because Ep>1, b) When the price of season cricket passes is 400 per pass, the quantity demanded is, 10,000 passes. When the price is reduced to 380 per pass the quantity demanded, (Nov. 2016), is 12,000 passes., i), ii), , Calculate price elasticity of demand, According to your answer in What is the degree of price elasticity?, Ans., , Relatively, , Ep = - 4 = 4, , elastic because, , Ep, , >1, , c)Given the following data, calculate price elasticity of demand for wheat when price, whether the demand for wheat is elastic, increases and when price decreases. State, (Nov. 2017), , or inelastic., , Solution:, i) When, , Ep, , Price of wheat, , Market demand for wheat, , 15, , 5,000, , 20, , 4,500, , price increases

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Business, , Economics, , 66, Old Quantity (Q), , Old price (P) = R 15, New, , price (P1), , 5000, , units, , 4,500, Quantity (Q1)=, , New, , R 20, , =, , =, , (F.Y.B.Com.), , (Sor, , m.-I) (Pa, Elas, , units, , Quantity Old Quantity, = 4,500-5,000 = -500, , AQ, , New, , =, , AQ = New Price, = 20, , Old price, , 15 5, , 15, , Ep, , T0-0.3, Relatively, , inelastic demand because, , Ep, , <, , 1, , i) When price decreases, Old Quantity, , Old price (P) = 720, New, , price (P1), , =, , New, , F 15, , 4,500, , =, , Quantity, , =, , units, , 5000 units, , AQ = New Quantity - Old Quantity, , = 5,000-4,500, AP, , New, , =, , price, , -, , 500, , Old, , price, , = 15 -20 = -5, , Ep, , AP*, 500, , 20, , 4,500, 4, , 90.44, , Relatively inelastic demand because Ep < 1, d), , A movie, , theatre charged 100/-per ticket and sold 500, tickets per show. When, price of tickets was raised to 125/- the theatre was able to sell, only 450 ticc, Estimate price elasticity of demand for movie, tickets. Is it beneficial for the thear, raise the price? Justify, your answer., (Nov.20, , Solution:, , EP AP xQ, -50, , 100, , 2 5 * 500 -0.4, Price, , elasticity of demand, , No, it is not beneficial, inelastic demand., , e)In, , a, , to, , is -0.4., raise the, , price. Since TR will reduce due, , town, 250 luxury, , to relati, , cars were sold per month when, per capita income, improved to 15,00,000, the demand, 500 per month. Calculate, for luxury e 0, income, of demand for, elasticity, Draw an appropriate, luxury cars(March, i, diagram to illustrate the, 20, , 7, , 10,00,000., , (PC), , As PCI, , situation given above.

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Elasticity of Demand, , 67, , Solution:, EY, , 250, , 5,00,000, , Income elasticity, , ot, , *, , 10,00,000, 250, , demand for, , 2, , Ey>1, is 2., , cars, , 15,00,000, 10,00,000, , 250 500, , Quantity, (luxury cars), , At, , 46 per unit, the demand for a, 46 to 50 per unit, the demand, , elasticity of demand., , g)When price ot a good rises from, 20 units to 10 units., Compare, , demand is elastic or inelastic., , h), , commodity, decreases, , is 30 units. If the price increases from, from 30 units to 15 units. Find the price, , Ans., , 5 per unit to, , expenditures, , -5.75], , 6 per unit, its demand falls from, , on, , the, , good, , to, , determine whether, , [Ans.: -2.5], , How income elasticity of demand can be calculated if the income of a person is, $ 4000 per month and he purchases six CD's per month. Let us assume that the, , monthly income of the consumer increase to $ 6000 and the quantity demanded of, CD's per month rises to eight., Ans.: 0.61, ), , Price of butter rises from, 10 per 100 grams to 12 per 100 grams. Demand for, margarine rises from 50 hundred grams to 72 hundred grams. Calculate cross, , elasticity of demand., ), , [Ans.: 2.2], Suppose the relationship between the price of raw-material X and its demand is as, , follows:, Price ), , Quantity Demanded, 80, 70, 50, 40, 30, , 10, , 20, 30, 40, 50, , Work out the arc elasticity of demand when the price is between, , a) 1 0 and R 30, , b)20 and 7 30 c ), , 40 and, , Ans.: (a) 0.46, k) Calculate arc elasticity of demand, if at a price of, , demanded. f the price of the commodity falls to, , 50, , (b)-0.86, , (c)-1.21, , 10. 20 units of a commodity are, , 6 and consequently demand for, , the commodity increase to 25 units., , When market price rises from, 850 units. Work, , 16., , a), , b), , out arc, , 5 to, , 7, demand contracts from 1,000 units to, , price elasticity of demand., , Define cross-elasticity of demand., of demand, Would you expect the cross-elasticity, of products, for each of the following pairs, i)Allwyn and Godrej refrigerators., , zero, , Ans.:-0.491, to, , be positive, negative, , or

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Busiss, , ii), , l c o m c s (F.Y.B,Com.), , (S, , - I) (Pape, , Tables and chairs., car, , and Titan, , watch., , iii), , Maruti, , iv), , Sharp, VCR, Sony, Computers a n d Diskettes., , VCR., , and, , v, vi, , Cadbury, , vii), , Pizza, , What, , chocolates, , and Nestle, , and Pepsi., , general, , rule, , can, , you, , give, , chocolates., , to base your answers?, , OBJECTIVE QUESTIONS, , 2., , following concepts, Price elasticity demand, demand, Income elasticity of, , 3., , Cross, , 4., , Promotional, , Define the, , A., , 1., , B., , (Nov. 20, , elasticity of demand, elasticity of demand, , Fill in the blanks, 1., , demand., given price is the case of, demand., represent relatively-, , An endless demand at the, , demand curve, 2. AIf steeper, income rise by 10%, demand, , too rise by 10%, then income elasticity of dema, , is, , 4. Income elasticity of demand is negative for, , ., , If two goods are unrelated to each other, then, , goods., it is, , cross, , elasticity of demanc, , 6. Advertisement elasticity of demand is always., 7., , Different, , are indicated by differently sloping income demand curve., , degree of price elasticity., 8. A vertical straight line demand curve implies, 9. Commodities which requires a large portion of consumer's income tend to ha, demand., 10. Jointly demanded goods tend to have., demand., demand., 11.Aflatter demand curve represent relatively, 12. If elasticity of demand 1 , the marginal revenue is., , Ans.: (1) perfectly elastic; (2) inelastic; (3) unitary; (4) inferior; (5) zero; (6) positi, (7) Income elasticities; (8) zero; (9) elastic; (10) inelastic; (11) elastic; (12) zero], , C., , Multiple choice questions:, , 1. Between a price of 7 65 and, , 50, the, , given demand curve DD implies, a) Unitary elastic demand, b) Perfectly inelastic demand, c)Perfectly elastic demand, d) Relatively inelastic demand, 2. On a flatter demand curve, if price rises, , 65, , by, , 20 percent, the quantity demanded will, , most likely:, a), , Remain unchanged, , b), , Increase by 5 percent, , o, , 20, , Quantity

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Elasticity of Demand, , dDecrease by more than 20 percent, , 69, , Fall by exactly 20 percent, , el, , The, a), , Decrease by less than, cross, , price elasticity, , The ratio, , of, , of, , percent, , demand, , percentage change, , price., b) The ratio, , 10, , defined as:, demand, , is, , in the, , to, , the, , percentage change, , ot percentage, , change in the demand for given, percentage change in the price, product, of related other, ratio, ot, c)The, product., percentage, in the demand for, change, in, the, change, product X to the, a, , a, , dThe, 4., , demand for product, , ratio of, , to the, , percentage, , Y., , different elasticities., , two, , A positive cross-price elasticity coefficient, implies that:, a) Two products are, substitutes, b) Two products are, jointly demanded, c) Two, , d) Two, , products are complementary, products have no relations, , 5. When the, When the, , price, price, , of, , a, , of X, , 1000 units. Then the, , 6., , in tne, , a), , -, , 1.75, , c), , 0.80, , product, , X is R 60, per unit,, increased to T 100 per, , the quantity demand is 2000 units., unit, the market demand contracted to, , price elasticity of demand coefficient is, b), d), , -0.75, 0.75, , Measurement of demand elasticity enables the manager to:, a), , Know the, , c), , Trace the demand behaviour, , magnitude of demand, b) Characterised the nature of demand for the, , product, , d) Consider both (a) and (b), , 7., , e) Consider (b) and (c), ) All of the above, Which of the following can be, a) Petrol, , expected to, b), , have, , a, , flatter demand curve?, , Salt, , c)PlasmaTV, , d) All of the above, 8. Which of the following is a possible coefficient of inelastic demand?, , 9., , a) 3.3, , b), , 0.6, , c)1.1, , d), , 1.0, , the price of product increases from 5 to 10 and corresponding changein, fdemand, is from 30 units to 12 units; it is the case of :, a, , a), , b), d), , Unitary elastic demand, , c)Inelastic demand, , Elastic demand, Perfectly elastic demand, , 10. Which could be a positive cross elasticity demand between Butter and Jam?, , a) 1.0, c)+0.9, , b), , 0.9, , d, , 2.0, VI:When demand is perfectly elastic, the demand curve is, , a) Steep, c) Linear, e) Vertical, , b), , Non-linear, , d), , Horizontal straight line

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(F.Y.B.Com.), , Business, 70, demand, 2 A product's market, , tends, , to, , be, , inelastic, , There, , b), , a)There are many suppliers, , d), , (Sem,, , -I)4, , conomics, , (Paper, , when, , are, , All of the, , several, , substitutes, , above, , c)Lesssubstitutes, e)None of the above, 13. On, a), , a, , linear, , horizontal, , demand, , b), , Elasticity is zero, towards, , Elasticity is low, 14. Unitary elastic demand, a), , is, , d), , origin, , represented by, , sloping demand, , curve, , Hyperbola slope demand, referred, 15. The demand for a product is, b), , curve, , to as, , price-inelastic,, , than unity, The elasticity coefficient is less, do not respond much to the price, The, , buyers, , price, d) Both (a) and (b), , c)The fall in, , e), , :, , Vertical demand curve, , d, , a), , Elasticity is infinity, above, All of the, , Horizontal demand curve, , b)Downward, c), , curve :, , is, , accompanied, , variation in the market, , by the decrease of demand, , Both (a) and (c), , 16. The basic formula for the, , if:, , advertising elasticity of demand, , coefficient is:, , a) Ratio of rise in demand to rise in advertising expenses, b) Percentage change in quantity demanded/percentage change in advertisi, , expenditure, c) Absolute change in demand/absolute change in advertising expenditure, d) (% D D) (% D A), 17.In the.case of a linear demand curve, , a) Elasticity is same throughout, b) Elasticity varies at different points, c)Demand is highly elastic at vertical intercept, d) Demand is constant, 18. If an increase in the price of product X does not change its total sales revenue, manager should infer that the demand for X is, a), , Undeterminable, , C)Relatively inelastic, , b), , Unitary elastic, , d), , Perfectly inelastic, , 19. Usually demand for air travel in business class is assumed to be:, a), , Highly price elastic, , c)Unitary elastic, 20. Market, , demand for necessaries, , a) Highly price-elastic, , C)Perfectly elastic, , are, , b), , Price inelastic, , d), , Undeterminable, , usually:, b), d), , Price-inelastic, Perfectly inelastic, , 21. Which of the following product has nearly perfectly inelastic demand?, a), , Salt, , C), , Petrol, , b)Electricity, d, , Higher Education, , in, , Management field

Page 21 :
sticity o f D e m a n d, , elasticity of demand (e), , 22., , a), , Positive, , c), , 23. If, , 1, then, , <, , marginal, , Zero, , elasticity of demand, , =, , 1, , than, , 24, , Negative, , d), , None of these, revenue is., , b), , c)zero, , revenue is, , b), , marginal, , a) positive, , 71, , s'g'R, , always, , negative, , d) none of these, lf cros elasticity of demand is, positive, goods are, a) Complementary, , b)Substitutes, , c)notrelated, 25. If a small reduction in, a) less than one, c), , 26., , price leads, , d, to, , is the, , a), , of the, rightward, An increase in income, , c), , Lower prices of petrol, , fall in total, , a, , equal to one, , Which, , None of these, greater than one, , d), , none, , of the, , b) An increase in population size, d) All of the above, , is called, , divided, , by, , a, , percentage change, , 28. On the lower, , of, , segments, , a, , elasticity of demand is, , b) price elasticity of demand, d) elasticity of substitution, downward sloping straight line demand, b), d), , = 1, , d), (2, , Ans. (1, , 11-d), (12, (21 a), 22, , -, , c), (3 - b), (4 a), (5 b), (6 - e), (7 c), (8 b), (9 d), (10, c), (13 b), (14 d), (15 d), (16 -b), (17 b), (18 b), (19 b), (20--b),, b),, b), (23 c), (24 b), (25 a) (26- c), (27 -b), (28- b)], -, , -, , -, , -, , -, , -, , -, , -, , -, , -, , -, , Group 'BB', , Elasticity of demand (e), , 2., , Average Revenue (AR), , 3, , Marginal Revenue (MR), Promotional, , elasticity, , a), , MR (e, , b), , AAA Q, , e, , - 1), , c)AR/AR - MR, of, , d), , AR-), , demand, Ans. (1 c), (2 - a), (3 -d), (4- b)], I., , a), , Group 'B', Inferior goods, , b), , Normal goods, , Group 'A', , 1., , Positive income elasticity, , 2. Negative, , 3., 4., , Ans.:, , price, , none of the-above, , -, , Group 'A, , 4., , curve, , <1, , C Match the columns, 1., , price, , (Nov. 2016), , a)>1, c), , in, , (Nov. 2016), , a) income elasticity of demand, , c)price elasticity of supply, , is, , above, shift of the demand curve for cars? (Nov. 2016), , cause, , percentage change in quantity demanded, , 27.A, , outlay, elasticity of demand, , b), , income, , elasticity, , Positive cross-elasticity, Negative cross-elasticity, , (1-b),, , (2, , - a),, , (3, , -d), (4-c), , c)Complementarygoods, d), , Substitutes, , -

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Business Economics, , 72, , D., , State, , 1, , v., , whether the, , -., , statements are True or False:, , In case, , positive., or zero., negative, be, positive,, demand, of, may, elasticity, demand curve implies zero price elasticity., , is, of inferior goods income elasticity of demand, , A.vertical, , Promotion elasticity is always positive., 6. The concept of elasticity of demand has no useful application., 5., , A, , perfectly elastic demand, , A horizontal demand, , curve, , represented by rectangular hyperbola, implies perfectly inelastic demand., , is, , curve., , in zero income elasticity, change in income has not effect on demand., 10. If elasticity of demand is infinite, marginal revenue will be increase., 11. When e =1, total revenue reaches its maximum., 12., , (Paper, , If cross elasticity between two goods is positive, goods are necessarily, ly complen., complem, , The cross, 4., , following, , (F.Y.B. Com.) (Sem,, , Demand for electricity is elastic., , 13. Habits makes demand inelastic, Ans.: True: 3, 4, 5, 9, 11, 12, 13, , False: 1, 2, 6, 7, 8, 10]

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Business Economics (F.Y.B.Com.) (Sem. -, , I) ( P a p e r, , S6, , MODEL QUESTIONS, 1., , What is demand forecasting? Explain the significance of demand forecasting, (March 2017, Nov. 2018), , 2., , Explain the various Survey methods of demand forecasting., , 3., , Explain the various Statistical methods of,demand forecasting., , 4., , What are the criteria of good demandforecasting, What are the Various types of demand forecasts?, , 5., , 6., 7., 8., , (Nov. 2016, Nov. 2017), , (Nov. 2016, March 2019, What are the steps in demand forecasting', (Nov. 2017), Explain the least squares method of demand forecasting., What is demand forecasting? Explain any two methods of demand forecasting., (March 2018), , i)DelphiMethod, ii) Consumer survey method, ii) Regression method, iv) Time series analysis, 9., , Write short notes, a) Significance of Demand Forecasting, , (March 2018), , (Nov.2016), , b) Consumer Survey Method, , c)Collective Opinion Method, , d) Market Experimentation, , e)Criteria of Good Demand Forecasting, , Regression Method, g), , Delphi Method, , h) Short and Long term Demand forecasting, i) Steps of demand forecasting, 10. Distinguish between, a) Short-term and long-term demand forecasting, b) Experimentation in laboratory and test marketing, 11. Calculate the following:, a) Given the following demand function QDx = 100, , (Nov. 2017), , 0.45 Px what is your forecast for, (March 2018), , QDx when Px is 20, 30 40?, , Solution, When Px ={ 20, , QDx = 100-0.45 (20) = 100-9 =91, , When Px =7 30, When Px= 40, , QDx, , 100 - 0.45 (30) = 100, , QDx, , 100-0.45(40) = 100-18 = 82, , b) Given the following demand function Qpx = 200, QDx when Px = 10, 20 30, , 13.5 = 86.5, , 0.32 Px, What is your forecast for, (Ans.: Qdx =196.8, 193.6, 190.4, , C) Civen the following demand function QDx = 60-0.7Px. Iffuture price is R 20. Wha, , would be your forecast of quantity demanded?, (Nov. 2016), (Ans.i0, d) Given the following demand function Qpx = 200 0.45Px, What is your forecast fof, Qox when Px is 40, 50, 60?, , (March,2017, (Ans.:QDx: 182, 177.5, 173

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emand Estimation and Forecasting, , The annual, , 87, , sales of Aman Co., , are as, , follows:, , Years, , Sales, , 1987, , 40, , 1989, , 50, , 1991, , 55, , 993, , 60, , 1995, , 58, , 1998, , 67, , Estimate sales for the years 2000 and 2001. Fit a linear, The annual turnover of a company is as follows, Year, , . 1991, , Sales (in thousand R, , 1993, , 45, , 1995, , 98, g) By the method of least squares, compute trends values, Year, 1981, 1982, 1983, 1984, 1985, 50, Sales, i n lakhs), , 62, , 56, , 78, , 48, , regression equation., 1997, , 1999, , 46, , 75, , 74, , Forecast the annual sales for 1988., , h) Project the trends of sales for the next three years, Year, , Sales i n lakhs), , 1981, , 120, 140, 150, , 1982, 1983, 1984, , 170, , 1985, , i), , 190, , The following series show the sales of fertilisers in A.P. during 1980-1985, Years, Sales in lakhs), 83, 92, 71, , 1980, 1981, , 1982, 1983, 1984, 1985, , 90, , 169, 200, , Using the method of least squares, find the trend values and estimate the sales for, the year 1986., )Usingthe following demand equation, , Y=-3.2, , +0.62 X, , estimate the demand for road transport in 1985, if the population is 20,44,000 in a, , city., OBJECTIVE QUESTIONS, A., , Define the following concepts, 1., , B., , (Nov. 2016), , Demand forecasting, , Fill in the, , blanks:, Moving averages can, , 2. Under, 3., , be used to measure a., method sales man are asked to estimates expected sales., , forecasting, , uses, , historical figures, , to, , predict future results.

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(F.Y.B.Com.), , iem., , (Sem, , -, , Economics, , Business, , 88, forecasting, , ), , mand for the produc, , (Papy, , perceive., is to, , The aim of demand, data., time series, target., method, 5. The, i, tofix, essential to, demand., 6. Demand forecasting is very, ture; (5) Tren, Trend; (6) s, (4) tuture;, an estimate ofthe, Series;, is, forecasting, Time, Demand, 4., , uses, , Collective Opinion;, , Ans. (1) Trend; (2), , (3), , (7) futurel, , B., , Multiple choice questions:, movement, , 1. Trend refers to:, a), , Short-term variations, , c), , Perfection, observations, , An average, past, a), Delphi method, , of, , 2., , c) Sales, 3. Which of the, , d), , Regression, , used to predict, , bd), , following, , component, , method, , Moving average, Managerial skill, , of time, , covers, , rred to, analysis referre, , b), , a), , Trade cycle, , c), , Raulan variation, , above, d) All of the, , a), , Conditional, , C), , Accurate, , Seasonal trend refers to, a), , B., , Demand, , Unreliable, , d), , Trustworthy, , b)Variations within a yeartime, , an estimate, , Past, , a), c), , Future, , The methods of demand, , ., , b), , d), , forecasting is, , a), , long t, , Trend, , Cyclical fluctuation, , c)Very long period, , of data, , to, future referred, , period?, , 4. Demand forecasting is always:, , 5., , b), , Long-term, , of the above, , None, , demand., , ofthe, b), , Present, , d), , None, , of these, , forecasting is are, b), , Survey method, , Statistical method, , d)Both (a) and (b), , c) Only (a), method uses time series data., 8. The, b) Delphi, a) Sample survey, d) Trend, c) Laboratory experimentation, 9., , Expert opinion is a, a), , c), , Survey method, , b) Statistical method, , both a and b, , d) none of the above, , [Ans.(1-b), (2 -b), (3 - b), (4-a), (5 - b), (6-c), (7- d), (8- d), (9- a)], C., , Match the following:, , Group B, , Group 'A, Method, 1. Collective Opinion, , 2., , 3., , Market Experimentation, , -, , a), (3, , Quantitative Method, , d) Trend Projection Method, , 4. Statistical Method, c), (2, , Test Marketing, , |c)Sales-Force Polling Method, , Time Series Method, , [Ans. (1, , a), b), , d), (4 b)], -, , (Nov. 201