澳洲代写assignment:基础经济学代写 Foundation Economics
Assignment
Question One:
a)The heavy storm in this case is a natural disaster. The areas stricken by the heavy storm will decrease the supply of coffee, which means the supply curve will shift to left and up under the condition where the decrease of the supply is not resulted by the factor of price. The following diagram can illustrated the impact brought by the storm on the market equilibrium prices vividly.
It can be seen that the equilibrium is E in the diagram, and because of the storm, it shifts to left and up while the prices are not changed. Then there is a new market equilibrium gained, referred to E’ in the diagram. Compared to the former equilibrium, the new one has increased in prices and decrease in demand certainly.
Question Two
The barriers to entry allow the firm to earn excess profits in the long run by getting rid of the supply-demand relation in the market. It is not restricted to the prices strategies given by the market force. Reversely, it will affect the supply-demand relation. According to the total number of firms in the market, there are three types, competition, monopoly and oligopoly. The supply-demand relation only has exerted the influences on the first one, in which the seller is the price-taker. Due to few firms existing in the market of monopoly, and even one in the oligopoly, the seller is the price-maker. In detail, the demand curve confronted by monopoly firms is a rightly downward curve while the revenue curve includes both average and marginal ones. The demand curve is P = P (Q) = a – b Q. The total revenue is PQ. The average revenue (AR) = PQ/Q = a - b Q and marginal revenue is MR = d (TR) /d (Q) = a - 2bQ. It can be shown in the following diagram. When AR>SAC, the firm gains excess profits.