QUESTION 1 Explain consumer surplus and producer surplus. Illustrate the effects on consumer surplus and producer surplus when the price is below the equilibrium price using suitable graphs. QUESTION 2 Table 1 shows the qua

QUESTION 1

1. Explain consumer surplus and producer surplus.
2. Illustrate the effects on consumer surplus and producer surplus when the price is below the equilibrium price using suitable graphs.

QUESTION 2

Table 1 shows the quantity and price that form a monopolist’s demand curve.

Table 1

1. Based on Table 1, fill up the columns of Total Revenue (TR), Marginal Revenue (MR), Marginal Cost (MC), and Total Profit. (Prepare your answers in the form of a table).
2. What is the value of fixed costs for this firm?
3. Determine the level of output that maximises the monopolist’s total profit.

QUESTION 3

1. Define Price–Consumption Curve (PCC) and Income-Consumption Curve (ICC).
2. illustrate the curves that can be derived from PCC and ICC. Explain.

QUESTION 4

Assume price (P) = RM15, quantity (Q) = 12 units,  average variable cost (AVC) = RM8 and average cost (AC) = RM10. This firm  operates in perfectly competitive market.

1. a) What is the formula for profit? b) Calculate total cost (TC).
2. Calculate the total revenue (TR).
3. Calculate the economic profit of the firm.
4. Shade the area that represents the economic profit of the firm.