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Assignment One

This document outlines an assignment for a Microeconomic Theory course at Cairo University, due on May 15, 2025. It includes specific instructions for submission, citation requirements, and two essay questions regarding pricing strategies for a vending machine based on temperature and the features of OPEC. Students are required to analyze demand under different conditions and discuss OPEC's collusive structure and recent cheating instances.

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radwaahmedsamir11
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13 views2 pages

Assignment One

This document outlines an assignment for a Microeconomic Theory course at Cairo University, due on May 15, 2025. It includes specific instructions for submission, citation requirements, and two essay questions regarding pricing strategies for a vending machine based on temperature and the features of OPEC. Students are required to analyze demand under different conditions and discuss OPEC's collusive structure and recent cheating instances.

Uploaded by

radwaahmedsamir11
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Faculty of Economics & Political Science Microeconomic Theory (2)

Cairo University
Spring Semester 2025

Assignment One

Important Instructions:
- The assignment should be handwritten only and submitted by email to:
noha.mustafa25@gmail.com
- Both In-text citation and a references list should be included in the assignment.
- The “essay question” should be covered in 1.5 to 2 pages.
- The deadline for submission is Thursday: May 15 (11:59 pm)

Question One: Problem:


Suppose that Spiro Spathis uses a new type of vending machine that charges a price according to the
outside temperature. On “hot” days—defined as days in which the outside temperature is 25 degrees
Celsius or higher—demand for vending machine soft drinks is: Q(P) = 300 − 2P. On “cool” days—when the
outside temperature is below 25 degrees Celsius —demand is: Q(P) = 200 − 2P. The marginal cost of a
tinned soft drink is 20 cents.

a. What price should the machine charge for a soft drink on “hot” days? What price should it charge on
“cool” days?

b. Suppose that half of the days are “hot” and the other half are “cool.” If Spiro Spathis uses a traditional
machine that is programmed to charge the same price regardless of the weather, what price should it set?

Question Two: Essay Questions:


State the main features of the OPEC and explain the nature of its collusive structure. Discuss recent
instances of cheating (broken agreements) within the OPEC and their possible economic implications.
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