1. Explain the profit maximisation strategy for perfectly competitive firm.
2. a)In Sydney market, demand for ACER is given by the equation P = 30 - 2Q and supply of ACER is given by the equation P = 6 + 4Q. If Sydney market is in equilibrium, determine the equilibrium price (P) and quantity (Q) of an ACER and show the equilibrium condition in a graph. (3 marks)

b)From the equilibrium in part d), if price of an ACER decreases to $16, what would be the quantity demanded for ACER, show this using a graph. In this case, calculate the price elasticity of demand for ACER. (3 marks)