Sem: NOV-2024 Maximum Marks: 50 Examination: End Exam Date: 24th Nov 2024 Duration: 2.5hrs
Programme code: 18 Programme: MBA for Working Executive	Class: FY	Semester: Batch- 2023-24 (ATKT-2)
College: K. J. Somaiya Institute of Management	Name of the department/Section/Center: Eco
Course Code: 117P18C105	Name of the Course: Microeconomics
Instructions: Attempt any 5 questions.

Question No.	Max. Marks
Q.1	a. Due to technological advancements, there has been a significant increase in the production of electric vehicles (EVs). Assuming no change in the demand (or shift in the demand curve), explain with the help of a diagram the new equilibrium in the market due to increased production of EVs. Also, assume that EVs are considered a luxury good. Examine the impact of increased production on consumers and producers. b. A local grocery store raises the price of organic vegetables from ₹100 to ₹130 per kg, causing sales to decrease from 1,000 kg to 600 kg. i. Calculate the price elasticity of demand for organic vegetables and explain what it indicates about consumer preferences. ii. How would the concept of cross-price elasticity apply if the price of regular vegetables changes? Discuss its relevance in this context.	5+5
Q.2	A bicycle manufacturing company's production facility has fixed costs of $500,000 per month and a variable cost per bicycle of $400. Currently, the company produces and sells 2,000 bicycles per month for $1,000 each. A. Calculate the total cost, average cost, and marginal cost of producing electric bicycles at the current production level. Explain the difference between these cost concepts and why they are important for managerial decision-making. B. The company is considering increasing production to 3,000 bicycles per month in response to rising demand. Assuming the fixed costs remain the same and the variable cost per unit stays constant, what will happen to the total cost, average cost, and marginal cost? Based on your calculations, discuss whether the company should scale up production, considering cost efficiency.	10
Q.3	a. Define returns to scale and explain all three types of returns to scale with appropriate examples. b. Explain the difference between economies of scale and economies of scope in business	5+5
Q.4	What are the characteristics of a perfectly competitive market? Why firms are ‘price taker’ in a perfectly competitive market?	10
Q.5	Discuss the characteristics and the reasons for the existence of a monopoly. ‘Monopolist firm can either fix the price or output, not both’. Discuss this statement with the help of an example.	5+5
Q.6	What makes an oligopolistic market different from others and what is the significance of these characteristic features? Role of Advertising in a monopolistic competition.	5+5