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Question 1 Consider the following table that represents the reality of a monopoly Quantity TC MC P Profits 0 40 40 Find2 70 38 4 90 36 6 98 34 104 32 10 110 30 12 120 28 14 134 26 16 154 24 18 184 22 O a) Fill the table (on the answer sheets) b) What is the optimal output for the monopoly? What are the maximum profits? Question 2 The table sets out Sue's Surfboard total product schedule Labour Output (workers per (Surfboard per week week) 30 70 w No 120 160 190 210 220 a) Calculate the average product and the marginal product of labour, Draw the two curves on the same graph. b) Over what output range does Sue's Surfboard enjoy the benefit of increased specialization and division of labour c) Over what output range does the firm experience diminishing marginal return of labour?Question 3 A perfectly competitive industry has 75 identical firms in the short run, each of which has the short-run cost curves listed in the following table. Output Average total cost Average variable cost Marginal 10 25.6 16.9 11 11 24.3 16.4 13 12 23.3 16.1 15 13 22.7 16.0 17 14 22.3 16.1 19 15 22.1 16.3 21 16 22.0 16.6 23 17 22.1 16.9 25 18 22.2 17.4 27 19 22.5 17.9 29 20 22.8 18.5 The industry demand is given in the next table Price Quantity demanded 10 1400 12 1345 14 1290 16 1235 18 1180 20 1125 22 1070 24 1015 26 960 28 905 30 850 What is the shutdown point? What is the break-even point? o ge What amount of profit (or loss) is being made by each firm at the short-run equilibrium? Is this industry in long-run equilibrium at its present size? What is the optimal number of firms in the long-run?Question 4 Explain why a firm may be operating in the "short-run" for one month while the "short-run" for another firm may be one year. Question 5 The following diagram illustrates the situation of a firm on a monopolistic competitive market. The Monopolistically Competitive Firm in Short-Run Equilibrium MC CO AC un Costs and revenues D1 N MR1 0 1 2 3 4 5 6 7 8 9 10 11 12 Q Quantity per period a) Find (for values, your answers must be in link with the diagram and will be approximative) The price in the short run for the firm. The quantity produced by this firm in the short run. Profits (or losses) made by this firm in the short run. b) Explain what will happen in the long run to this firm and to the industry.(