Producer's surplus is pric e pri the to pay a i: to price The income elasticity of demand of good X is I _ cod I mly both I 2 _77_ Cood X is The assumption that perfectly competitive firms are price takers implies that the average revenue curve of such firms would be pu&ctly puftly relanvely elutic m the short relatively elutic in the Most industries exhibit decreasing returns to scale because of 40 of law o f dminishing Ushaped