1. Suppose at the profit maximizing level of quantity, a monopolist faces an elasticity of demand -2 and charges a price of $200. What is the marginal cost at the profit maximizing level of quantity?

2. Suppose a firm in competitive market has following cost of production: TC=50+3Q². For a price P=60, find the quantity that maximizes the firm's profit.

3True or false: The less elastic the demand a monopolist faces, the more market power it has. Explain conceptually why or why not.

4. What is the difference between economic profit and accounting profit? What is the economic profit of a competitive firm in the long run?

5. Suppose a firm in a competitive market has following cost of production:.

a) Find the price range for which the firm will choose to produce zero output in the short run.

b) Graph the short run supply curve for the same firm