Problem:
What's so perfect regarding Perfect Competition?
Use the data to answer the following question.
|
Quantity
|
Marginal
|
Marginal
|
|
0
|
-
|
-
|
|
1
|
2
|
10
|
|
2
|
3
|
9
|
|
3
|
4
|
8
|
|
4
|
5
|
7
|
|
5
|
6
|
6
|
|
6
|
8
|
5
|
|
7
|
10
|
4
|
|
8
|
12
|
3
|
1. For the product shown above, suppose that the minimum point of each firm's average variable cost curve is at the $2. Make a demand and supply diagram for product and point out the equilibrium price and quantity.
2. On the graph, label the area of consumer surplus as f. Label the area of the producer surplus as g. If equilibrium price were $2, what would be the amount of the producer surplus?