Explain five methods of determining the price of a product other than price control (10 marks)

5/12/2020

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Methods of determining the price of a product other than price control

Bargaining / Haggling — terms of exchange is negotiated / argued / debated between buyers and sellers.
Demand and supply / price mechanism interactions between forces of demand and supply.
Auction — prices determined by the highest bidder.
Tendering — Prices determined by the (lowest) bidder who meets the required specifications.
Retail price maintenance / recommended retail price / products price fixing / price fixing where producers / manufacturers agree on the price of commodities.
(Price) collusion — where different market players such as buyers / sellers conspire to fix the price.
Taxation / subsidy — which will influence the selling / buying price.
Private treaty — a sale of property at a price agreed on by the seller and buyer without an intervening agency.

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The graph given below represents the demand and supply curves of milk.

2/12/2020

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The graph given below represents the demand and supply curves of milk

State four effects of a shift of the demand curve to the right. (4 marks)

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Explain five methods that the government may use to increase supply of goods in the market. (10 marks)

29/11/2020

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Methods that the government may use to increase supply of goods in the market

Methods that the government may use to increase the supply of goods in the market include:

Reduce the taxes levied on producers. This causes a reduction in the cost of production hence motivating producers to increase production.
Increase subsidies. The government meets part of the production cost hence making production more affordable.
Eliminating quotas on production. By not limiting the quantity of goods to be produced, the producers are free to supply as much as they can to the market.
Setting favourable producer prices. The government fixes the prices at a high level which encourages emergence of new producers! expansion of existing ones.
Improving access to credit. The government extends loans to producers through bodies like K.I.E., IDB and ICDC to boost investment in production.
Facilitating marketing. The government may form agencies that buy produce to cushion producers and stabilize selling prices e.g. through NCPB.
Availing new research findings and technology to producers. New methods of production from government research bodies like KARI, KIRDI KEFRI will help boost supply.

Methods that the government may use to increase supply of goods in the market

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The equations given below relate to quantity demanded and quality supplied at the equilibrium point:

27/11/2020

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The equations given below relate to quantity demanded and quality supplied at the equilibrium point:

Determine the equilibrium price and quantity. (4 marks)

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The demand for soft drinks has been on the increase. Explain five factors that may have contributed to this. (10 marks)

24/11/2020

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Factors that may have contributed to increase of soft drinks

Factors that may have contributed to increased demand for soft drinks include:

Favourable pricing.
The soft drinks are priced at a value that consumers can easily afford.
Increasing consumer incomes.
People are able to buy more of the products due to increased earnings.
High prices of substitutes.
Most of the products in the market that can serve as substitutes are highly priced hence not preferred by buyers.
Favourable tastes and preferences.
More consumers now like soft drinks as compared to other drinks.
Favourable government policies which keep the prices of soft drinks down/stable hence encouraging their consumption.
General increase in population.
With more people, more of the products are consumed.
Aggressive marketing/sales promotion.
More consumers are attracted to soft drinks due to intense advertising and other promotional strategies.
Equitable distribution of income among consumers.
Since many people have access to earning, they are able to buy more of the products.

The demand for soft drinks has been on the increase. Explain five factors that may have contributed to this

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Apart from the forces of demand and supply, list four other ways in which the price of a product may be set. (4 marks)

22/11/2020

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Other ways in which the price of a product may be set

Other methods of determining the price of a product apart from the forces of demand and supply include:

Auction
Haggling (Bargaining)
Price legislation/price control
Price discrimination
Tendering
Retain price maintenance

Apart from the forces of demand and supply, list four other ways in which the price of a product may be set

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State three circumstances under which firms would form a cartel.(3 marks)

22/11/2020

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Circumstances under which firms would form a cartel

Circumstances under which firms would form a cartel include:

When there is need to control output by each firm.
When there is need to be in control of market prices.
When there is need to eliminate stiff competition among the firms.
When there is need to restrict entry of new firms into the market.
When there is need to increase the firms’ bargaining power.
When there is need to guarantee the income and financial strength of the firms.

State three circumstances under which firms would form a cartel

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Determine the excess demand or excess supply from the combined demand and supply schedules of oranges given below

31/5/2020

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Determine the excess demand or excess supply from the combined demand and supply schedules of oranges given below

Answer

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Outline four characteristics of free resources.

25/4/2019

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previously: CHALLENGES FACED IN SATISFACTION OF HUMAN WANTS.

Characteristics of free resource.

They are plenty/abundant in supply
Free resources such as water and Air are freely available and flooding in supply.
Do not change possession
Free resources do not belong to anybody
They are evenly distributed.
Free resources are available everywhere
they don’t have money value/price
Free resources have no money value, meaning that they can be acquired for free.

next: EXPLAIN FIVE CHARACTERISTICS OF LABOUR AS A FACTOR OF PRODUCTION

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Explain five methods of determining the price of a product other than price control (10 marks)

Methods of determining the price of a product other than price control

The graph given below represents the demand and supply curves of milk.

Explain five methods that the government may use to increase supply of goods in the market. (10 marks)

Methods that the government may use to increase supply of goods in the market

The equations given below relate to quantity demanded and quality supplied at the equilibrium point:

The demand for soft drinks has been on the increase. Explain five factors that may have contributed to this. (10 marks)

Factors that may have contributed to increase of soft drinks

Apart from the forces of demand and supply, list four other ways in which the price of a product may be set. (4 marks)

Other ways in which the price of a product may be set

State three circumstances under which firms would form a cartel.(3 marks)

Circumstances under which firms would form a cartel

Determine the excess demand or excess supply from the combined demand and supply schedules of oranges given below

Determine the excess demand or excess supply from the combined demand and supply schedules of oranges given below

Answer

Outline four characteristics of free resources.

Characteristics of free resource.

Categories

Archives

Methods of determining the price of a product other than price control

Methods that the government may use to increase supply of goods in the market

Factors that may have contributed to increase of soft drinks

Other ways in which the price of a product may be set

Circumstances under which firms would form a cartel

Determine the excess demand or excess supply from the combined demand and supply schedules of oranges given below

Answer

​Characteristics of free resource.

Categories

Archives

Characteristics of free resource.