Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
loader
Add File

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!

ECON90015 Managerial Economics

tag 0 Download 11 Pages / 2,696 Words tag 01-03-2021

Question:

1. Read attachment 1. Uber is a service that matches private drivers to passengers that are seeking a ride from one place to another. Assume that the market for Uber rides is perfectly competitive.

a. Suppose that the market for Uber rides is initially in equilibrium. According to the article, what happens to the demand and supply for Uber rides after severe storms? Suppose Uber always charges the same price per kilometre travelled independent of the circumstances (e.g., at the original market equilibrium price before the storm). Is the market still in equilibrium? Explain using the demand/supply model with diagrams.
 
b. Now consider the surge pricing that Uber uses during busy times. According to Uber’s chief executive, surge pricing is ‘necessary to give more drivers an incentive to get onto storm-ravaged roads and squeeze through traffic to pick up people for rides.’ Do you agree with this statement? How would the use of surge pricing affect the market outcome on a day when there is a snow storm? Explain using the demand/supply model with diagrams.
 
c. In general, are consumers better or worse off with surge pricing, as compared to the case without surge pricing? Consider two different types of consumers: (i) the group of consumers who would have gotten an Uber ride without surge pricing; and (ii) the group of consumers who can only get an Uber ride with surge pricing, but not without. How does surge pricing affect the welfare of these two groups of consumers? Explain using the demand/supply model with diagrams.

2. Read attachment 2. Assume that the market for land is perfectly competitive.

a. According to the article, what is unique about the demand and/or supply curve for land in the cities? Explain.
 
b. According to the article, what has happened to the demand and supply of land in recent years? Has there been a shift in the demand curve? Has there been a shift in the supply curve? What has happened to the value of land over time? Explain using the demand/supply model.
 
c. The article states that a land tax is unlike other taxes (which distort economic activity) in that it cannot reduce the supply of land. Explain using the demand/supply model.

3. Read attachment 3. Assume that the market for hawker food is perfectly competitive.

a. Consider the case without any government subsidies and suppose the market is initially in a long-run equilibrium. Illustrate the long-run equilibrium using diagrams.
 
b. Suppose that the government decides to provide a subsidy to all firms on their monthly rent. Firms sign an annual contract for the rent they pay. How does the subsidy affect the fixed and variable costs of the firms? What is the impact of the subsidy on the firms in this market and on the price of hawker food in the short run and in the long run? Illustrate your answer using diagrams.

Part B – Case Study

Choose an Australian industry and analyse the most important factors affecting its profitability by using the relevant concepts and theories we have studied in Lectures 1-9. You should choose three or four specific profitability-influencing factors. You can choose factors that are currently affecting your chosen industry, or factors that seem likely to affect the industry’s profitability in the near future. Some possibilities to consider are:

  • Internal rivalry and the market structure: Which market structure best describes the market (i.e. perfect competition, monopoly etc.)? Provide measures of industry concentration if you can. Do you have reasons to believe that the market structure is likely to change in the future? Is the struggle for market share and increased profitability reflected mainly in price competition or in non-price competition? If it is non-price competition, what form does it take?
  • Threat of entry: Are there barriers to entry in your chosen industry? Consider how brand loyalty, economies of scale, intellectual-property law, and government regulation can each contribute to barriers to entry.
  • Substitutes and complements: Are there important substitutes and complements (in consumption) that could affect industry profits? You can consider related products that are either currently available or might soon become available.
  • Bargaining power of buyers: Is the input of your chosen industry bought by few large buyers with market power or a multitude of price-taking individual buyers with no market power? How does that affect profits? Have producers made relationship-specific investments with their buyers?
  • Bargaining power of suppliers: Is the market for inputs in your chosen industry concentrated or competitive? Here, you can choose to consider the markets for labour, land, raw materials, and capital. How does the relative concentration in that market affect input costs, and how can input costs affect your chosen industry’s profits? Have the producers in your chosen industry made relationship-specific investments with their input suppliers (for example, moving their factory close to a supplier’s business)? Can the supplier exploit this situation and how would that affect profitability? Are there substitute inputs that producers in your chosen industry can turn to?
  • Costs: What sort of cost structures do the firms in the industry face? Do the firms face any economies/diseconomies of scale, scope, and/or learning? How will these cost structures likely to affect the firms’ profit-maximising decisions?
  • Technological change: Are there technological changes that are likely to affect profitability in your chosen industry?
  • Government policy: Are there government policies that affect profitability via any of the factors above (e.g., raising barriers to entry) or in a different way?
  • Price discrimination: To what degree are firms in your industry able to engage in price discrimination? What type of price discrimination is it? How important is price discrimination for firms’ profits?
Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

Upload
Unique Document

Document
Under Evaluation

Get Money
into Your Wallet

Total 11 pages

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help (2021) Managerial Economics [Online]. Available from: https://myassignmenthelp.com/free-samples/econ90015-managerial-economics/tourism-industry-in-australia.html
[Accessed 27 September 2022].

My Assignment Help. 'Managerial Economics' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/econ90015-managerial-economics/tourism-industry-in-australia.html> accessed 27 September 2022.

My Assignment Help. Managerial Economics [Internet]. My Assignment Help. 2021 [cited 27 September 2022]. Available from: https://myassignmenthelp.com/free-samples/econ90015-managerial-economics/tourism-industry-in-australia.html.


Stuck on Any Question

Our best expert will help you with the answer of your question with best explanation.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

loader
250 words
Error goes here

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

We Can Help!

Get top notch assistance from our best tutors !
Excel in your academics & career in one easy click!

icon

Other Samples

Content Removal Request

If you are the original writer of this content and no longer wish to have your work published on Myassignmenthelp.com then please raise the content removal request.

icon

5% Cashback

On APP - grab it while it lasts!

Download app now (or) Scan the QR code

*Offer eligible for first 3 orders ordered through app!

screener
ribbon
callback request mobile
Have any Query?