What is the mid-point (averages) formula for elasticity of demand? What does it measure? What do the values (1), (2), and (.50) indicate? What are the determinants?
2. How would you expect the elasticity of supply of product X to differ in a situation of full employment in Industry X on the one hand, and of considerable unemployment in the industry on the other hand?
3. What is the difference between the short run and the long run? Explain the Law of Diminishing Marginal returns.
4. Discuss the difference between the market demand curve of a purely competitive industry and the demand curve confronted by an individual firm in pure competition.
5. What is a monopolist, and what is required for a monopolist to earn profits in the long run?
6. What does the demand curve facing a monopoly look like? Why?
7. Briefly explain the behavior of consumers and businesses as illustrated in the "price elasticity of demand" and "price elasticity of supply".