Q2 l'lilLb-lARIiKb Vb. l'Kth-bhllhl'ib For the following question, we will consider two different markets: the market for Electric cars, and the market for milk. Below are two figures that illustrate the price and quantity decisions of a single firm that maximises its profit in each market. Price Price Quantity Quantity a. What do the demand curves represent in each diagram? Which diagram shows more elastic demand? b. In which market are products more differentiated? c. What criteria do consumers use to make a buying decision in each market? For which good would price be a more important criterion for consumers to make a buying decision? d. Using your answers from 1, 2 and 3, decide whether individual producers that produce these goods are price-takers or price-setters. Which market situation is better explained by which gure? Explain why