Introduction to Microeconomics

ECO 101: Introduction to Microeconomics

Section 11

Summer 2010

University X

Assignment 4

Full marks: 10

Time of Submission: Just A week After Assigning, at the end of the class time.

Person to be submitted to :ME

Answer all the questions. The parenthesis carries the credit for each question.

  1. Explain under each of the situation, whether a firm working under a perfectly competitive market would keep on producing or shut down.                                   (2+2)
    1. P=14; AC=16; AVC=10 and Q=40
    2. P=10; AC=10; AVC=8 and Q=20
  1. Under a Monopoly, what do you understand by rent seeking? How is it different from Dead Weight loss?                                                                                  (3)
  1. Why is the First Degree Price Discrimination allocatively efficient?          (3)