1a. Calculate the consumer surplus, and producer surplus given: P = 120- .25q and MC + 2q =5. Illustrate your response.

b. Evaluate the long-run equilibrium point of a monopolist with that of perfectly competitive firm and industry. Should the government dissolve Bahamas Power and Light and allow competition to prevail?

c. Explain the market mechanism of a perfect competitive market.

d. Some firms like BPL and Bahamas air operate where P < AC, explain why. (Hint: fixed cost are covered)

e. In class we explained why Super Value and Super Wash are very concern about an increase in the VAT.based on your understanding of tax burden, why is this fear such a concern?

Please provide illustrations where necessary.