Task 1

1. B. $20 per pound

2. D. More than to

3. Accounting profit and Economic profit are the same except that economic profit includes
implicit cost for taking one action versus another in the period. Economic profit is determined by
economic principles, not by accounting principles.  economic profit uses implicit costs, which
are typically the costs of a company's resources Economic profit differs quite significantly from
accounting profit. Instead of looking at net income, economic profit considers a company’s free
cash flow, which is the actual amount of cash generated by a business. Due to accrual accounting
principles, the figure is often materially different from accounting profit. Accounting profit is
also known as the net income for a company or the bottom line. It's the profit after various costs
and expenses are subtracted from total revenue or total sales, as stipulated by generally accepted
accounting principles (GAAP). 

4. Revenue Function- this will show the revenue per unit. Fixed revenue + variable revenue

Cost Function – this will show the revenue per unit. Fixed cost + variable cost

Profit Function – this will show the profit per unit. Fixed profit + variable profit

1. Qd = 5,000 – 1000P

Price Quantity of Demand

1 4,000
2 3,000
3 2,000
 4 1,000
5 0

2. Elasticity of Demand is the degree of responsiveness of quantity demanded due to the

changes in the price of products itself ceteris paribus.
Elastic Demand - indicate that the quantity demanded responds to price changes in a
greater than proportional manner.
Inelastic Demand -  where a given percentage change in price will cause a smaller
percentage change in quantity demanded.
3. Complementary Goods are goods that consumed together. These products is used
jointly with another product. Such a good usually has more value when paired with its
complement than when used separately and is usually purchased together rather than
separately.
Substitute goods are product that satisfies the same basic want as another product.
Substitute goods may be used in place of one another because it could be used for the
same purpose. When the price of one good increases, the alternative good’s demand
increases.
4. Price discrimination is a selling strategy that charges customers different prices for the
same product or service based on what the seller thinks they can get the customer to agree
to. In pure price discrimination, the seller charges each customer the maximum price he
or she will pay. In more common forms of price discrimination, the seller places
customers in groups based on certain attributes and charges each group a different price.
 First-degree Price Discrimination- prices in airlines, travelling industries,
petroleum products etc.
 Second degree Price Discrimination – PLDT subscription plans where the price is
based on the mbps.
 Third degree Price Discrimination – prices of jeepney fares for normal people vs
prices of jeepney fares for students, senior citizens and person with disabilities