1. You have been hired as an economic consultant by a price-taking (a perfectly competitive) firm that produces T-shirts. The firm already has a factory, so it is operating in the short-run. The price of T-shirt is $9, the hourly wage is $24, and each T-shirt requires $1 worth of material. The following table shows the relationship between the number of workers and output of T-shirts.

• The Assignment must be submitted only in WORD format via the allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented. This also includes filling in your information on the cover page.
• Students must mention question numbers clearly in their answers.
• Late submitted assignments will NOT be entertained.
• Avoid plagiarism; the work should be in your own words; copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) No pictures containing text will be accepted and will be considered plagiarism).

Submissions without this cover page will NOT be accepted. (Don’t change the cover page format.)

                                      (Total Marks: 10)

[Course learning outcomes covered: (LO1.1)]

Assignment Questions:     

Q1. You have been hired as an economic consultant by a price-taking (a perfectly competitive) firm that produces T-shirts. The firm already has a factory, so it is operating in the short-run. The price of T-shirt is $9, the hourly wage is $24, and each T-shirt requires T-shirt requires $1 worth worth of material. The following table shows the relationship between the number of workers and output of T-shirts.

1. Fill in the blanks in the table. (3 points)
2. What is the profit maximizing output? [ students may use marginal approach] (1 points)

Note: For answering question-1 (a) and (b) students are required to show all possible calculations.

Q2. See around you and pick up a firm which is either dominating the market or trying to create monopoly.

• (a) Write in brief about the firm chosen and explain how the firm is trying to create a monopoly or dominating the market? (2 points)
• (b) Elaborate your opinion, why we as a society should worry about a firm trying to create a monopoly? (2points)
• (c) Discuss some policy options a government could have to intervene in such market and prevent the monopoly creation. (2points)