ECONOMICS

Read the following and answer the questions below and on
Page three
.
Recent media advertising by Bear Music has made the i-teddybear an increasingly
popular educational toy for children. The firm is keen to increase profit margins by
improving
productivity
in the
long run
and selling the i-teddybear to member states of
the European Union.
The diagram below relates to the UK market for i-teddybear.
(
a
)
Explain what is meant by the following terms:
(i)
“productivity”;
(ii)
“long run”.
(
b
)
State the equilibrium price and quantity in the above diagram when demand is
D1 and Supply is S1.
(
c
)
(i)
Explain
one
reason why supply curves usually slope upwards from left to
right.
(ii)
Suggest
2
reasons for the shift in the supply curve for i-teddybears from
S1 to S2.
(iii)
Calculate the change in total revenue for i-teddybear following the shift
in supply from S1 to S2.
Price (£)
40
25
500
750
D1
D1
S2
S2
S1
S1
Quantity demanded and supplied per day
UK Market for i-teddybear

Originally posted 2016-10-25 09:59:48.

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