1) For the demand curve facing the monopolist, what one of the following is NOT TRUE |e| > 1 when MR>0 |e| < 0 when MR < 0 |e| < 1 when MR<0 |e| = 1 when MR = 0 (2) Producer surplus is defined as The area below supply and above the price of output The area above AVC and below ATC The area below the market price of output and above supply The area above MC and above the price of output

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A: *answer:

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A: Part a) Total revenue in market 1 = 80Q1 - 2.5 Q12  Marginal revenue in market 1 = ∆TR / ∆ Q1…

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A: Q=423-2P2P=423-QP=423-Q2P=211.5-Q2Now,TR=P×QTR=(211.5-Q2)QTR=211.5Q-Q22Thus,MR=∂TR∂QMR=211.5-Q

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Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.