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Estimate the numerical price elasticities of demand at points A and B in Figure Hint You may want to review the rule for calculating elasticities in Figure

Estimate the numerical price elasticities of demand at points A and B in Figure 9-1. (Hint: You may want to review the rule for calculating elasticities in Figure 4-5.) 6. Redraw Figure 9-4(a) for a perfect competitor. Why is dd horizontal? Explain why the horizontal dd curve coincides with MR Then proceed to find the profit-maximizing MR and MC intersection. Why does this yield the competitive condition MC = P? Now redraw Figure 9-4(b) for a perfect competitor. Show that the slopes of TR and TC must still match at the maximum-profit equilibrium point for a perfect competitor.

May 01 2020 View more View Less

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