Homework 4 (Due on 3/6 Friday hard copy in class, computer print is encouraged or handwrite has to be VERY clear) 1 point each question Question 1. A producer is facing the demand curve and has a technology that give the marginal cost structure in the table below. Quantity Price/demand |Revenue Monopoly Marginal Marginal Total Cost Revenue Cost 1 4 2 3 1 2 3 2.25 2.25 4 1.75 5 2.75 1.44 3.1 1) If under perfect competition, what is the optimal output quantity and price? 2) If under perfect competition, what is the firm's profit, and consumer surplus? 3) If under monopoly, what is its optimal output quantity and price? 4) If under monopoly, what is the firm's profit, and consumer surplus? Question 2. A producer is facing the labor supply curve and has a technology that give the marginal value of labor structure in the table below. Quantity Price/supply Total Expenditure Monoposony Marginal Total Value Marginal Expenditure value 1 1 5 2 2 4 3 3 3 4 3.9 2 5 4.5 1 1) If under perfect competition, what is the optimal labor input quantity and wage (price)? 2) If under perfect competition, what is the firm's profit? 3) If under monopsony, what is its optimal input quantity and price? 4) If under monopsony, what is the firm's profit