23-05-2012, 18:16 #1 freeze4real Registered User   Join Date: Nov 2009 Posts: 1,962 suply and demand equation hel exam tomorrw. HI, all can someone please help me how to do the above. i have an exam tomoorw. OMFG i'm f*ked The demand for a good is P+Q=30. The total cost function of the firm is TC = 1/2Q^2 + 6Q + 7. The profit maximising level of output for this firm is Q=7.
 24-05-2012, 01:32 #2 andrew Moderator     Join Date: Jul 2003 Location: Dublin Posts: 2,622 Mod: Economics What's the rest of the question?
24-05-2012, 01:34   #3
freeze4real
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Quote:
 Originally Posted by andrew What's the rest of the question?

Thats the question, and that is it True, False or Uncertain and explain your answer.

thanks

 24-05-2012, 12:10 #4 freeze4real Registered User   Join Date: Nov 2009 Posts: 1,962 it doesnt matter, kinda messed it up in the exam. but would you knw how to solve thsi. The inflation rate fell from 3% in 2011 to 2% in 2012. prices in 2012 are lower than in 2011. Is this statement true uncertain or false. I saidits true as i did new - old/old x 100 which was 100% apprently it was wrong? any opinion in this.
24-05-2012, 12:14   #5
irish_goat
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Quote:
 Originally Posted by freeze4real it doesnt matter, kinda messed it up in the exam. but would you knw how to solve thsi. The inflation rate fell from 3% in 2011 to 2% in 2012. prices in 2012 are lower than in 2011. Is this statement true uncertain or false. I saidits true as i did new - old/old x 100 which was 100% apprently it was wrong? any opinion in this.
Prices in 2010 = 100
Prices in 2011 = 100 + 3% = 103
Prices in 2012 = 103 + 2% = 105.06

No?

 Thanks from:
 24-05-2012, 14:54 #6 axel7 Registered User   Join Date: May 2012 Posts: 44 If prices were to be lower there would have to be deflation In this example inflation just decreased year on year, different from deflation.
24-05-2012, 15:40   #7
freeze4real
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Quote:
 Originally Posted by axel7 If prices were to be lower there would have to be deflation In this example inflation just decreased year on year, different from deflation.
So there's was a deflation decrease in price of goods. And inflationary also fell ? Is that it ?

24-05-2012, 16:33   #8
noodler
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Quote:
 Originally Posted by freeze4real So there's was a deflation decrease in price of goods. And inflationary also fell ? Is that it ?
Sorry, to use the same example as Irish Goat.

But if a Mars bar costs 1 euro in 2010

With inflation of 3% in 2011 - it now costs 1.03

With inflation of 2% in 2012 it now costs 1.05.

So, as you can see the Mars Bar in 2012 is still more expensive than the Mars Bar in 2011.

The rate of increase in prices may have slowed in 2012 (from 3% to 2%) but it was still a positive rate of increase (i.e. inflation rather than delfation).

There was NO deflation in this example.

24-05-2012, 23:30   #9
axel7
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Quote:
 Originally Posted by freeze4real So there's was a deflation decrease in price of goods. And inflationary also fell ? Is that it ?
inflation fell
no deflation in this question, sorry for the confusion.
Prices are rising every year, just at a slower rate

Last edited by axel7; 25-05-2012 at 14:20.