Question

Refer to the figure below. Price εκ Ο Q2 Q3 Q3 Quantity When the market is unregulated, producer surplus is represented by the area: Multiple Choice Ο ABC Ο DGF Ο DBC

2. If a firm faces a downward-sloping demand curve, then:

a. the firm could be either a perfectly competitive firm or an imperfectly firm.

b. the firm’s marginal revenue from selling an additional unit of output is less than price.

c. it is a perfectly competitive firm.

d. the firm’s production process exhibits economies of scale.

3,

Answer 1

Question 1

When market is unregulated then market is in equilibrium at the intersection of supply and demand curve.

The demand and supply curves are intersecting each other at point C.

The price corresponding to point C is B.

So, the equilibrium price is B.

The producer surplus is equal to area below the equilibrium price and above the supply curve.

This area is represented by DBC.

So,

When the market is unregulated, producer surplus is represented by the area DBC.

Note -: As per the Chegg Answering Policy, when more than 1 question is posted then, in that case, only 1st posted question is answered with complete explanation.