# ECO402 Assignment 2 Fall 2023 – Assignments – Solution VU

## ECO402 Assignment 2 Fall 2023 – Assignments – Solution VU

MICROECONOMICS (ECO402)

ASSIGNMENT # 02

DUE DATE: 18TH  FEBRUARY, 2021   MARKS: 15

The Case:

Pakistan Water and Power Development Authority (WAPDA) was established in 1958. It is an autonomous and statutory body under the administrative control of the Federal Government. WAPDA has a monopoly on producing electricity. The generation, transmission, and distribution of power is the responsibility of the WAPDA. In 2019-20, the total installed capacity of electricity was 36200 MW. Suppose that the amount of electricity for a household and its price are given below:

 Q (units) P (Rs.) 235 11 300 10 350 9 400 8

Requirements:

Keeping in mind the above scenario, solve the following questions.

1. Calculate total revenue (TR), average revenue (AR), and marginal revenue (MR) for each Marks: 12 (4+4+4) Note: Calculate TR, AR, and MR in table form.

 Q (units) P (Rs.) TR AR MR 235 11 ? ? ? 300 10 ? ? ? 350 9 ? ? ? 400 8 ? ? ?
1. Why marginal revenue is less than price (MR<P) in the case of monopoly. Marks: 3

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