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:

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.

1. Why marginal revenue is less than price (MR<P) in the case of monopoly. Marks: 3

IMPORTANT:

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Note related to load shedding: Please be proactive Dear students!

As you know that Pre Mid-Term semester activities have started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your

convenience; activity schedule has already been uploaded on VULMS for the current semester, therefore no excuse will be entertained after due date of assignments, quizzes or GDBs.

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