# Microeconomics: Questions

BGP 2008 Term I Microeconomics End Term Full marks 30 Time 2 hours 1 . This question contains two parts a. In era of hyperinflation, what would be the appropriate strategy for firms in the airlines and automobile sector to cope up with both competitiveness in the market and rising cost 5 b. Read the following answer the following questions Textbook publishers evaluate market size, the degree of competition, expected revenues, and costs for each prospective new title. With these data in mind, they estimate the probability that a given book will reach or exceed the breakable point.

If the publisher estimates that a book will not exceed the breakable point based upon standard assumptions, they may consider cutting production costs by reducing the number of illustrations, doing only light copy editing, using a lower grade of paper, or negotiating with the author to reduce the royalty rate. To illustrate the process, consider the following data 122 Cost Category Dollar Amount Fixed Costs Copycatting and other editorial costs 1 5,750 Illustrations 32,750 Typesetting

What is the Joint profit examining level of output when they enter the industry together How much will each firm produce b. What is the firms equilibrium output and

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