Name: Linkon Mathews Gomes “1D: 2094-§-99-076 Ane to the_@) Not-08 Given that, ‘The price oF commodity X,* fy = ThA ‘The price of commodity Y , Py = ma The dudget , B = Tr 2400 “The budget eonstnaint is, B= RK + PY > 9400 = AX+ 2Y 3 WY = 200-AX >Y = 1900- 2% Phe stope of the budget enstoaint ts = -2 fo, the coamen have must giveup -? units bf conmasity to got oie } unit of goimmodity XQuantity. of vanity " 1200 4000 800 600 Avo 200 Mapginal value of commodity Ky ngs = ¢ a. 60, the eansumen gots moiimum uilily ty bxying 600 nls oF commodity amd 200 umit of commodity x. Tt touches the indifement- cure at A whieh in the higher possible indiffepenee. qumve. 1 fhe price ¥ Jolla, A falls 10 B and C. Then the consumer wll | amope * amd fewer ¥.Ans to the Q- Nos- 08 © Marginal nate of substitution + o The anginal naie of cubeitution is the mount of, good that a Consumer is willing to consume compared 40 amother good.» as long ar the new good is enually sutifying ips is wed Indifference theory. to amalyge consumer behawion. ( Spay cune under _mmapay A monopoly inn has mo ell: defined supply. eaipve. Tn other words, thene is mo unique’ supply eunve fer the monopolgist- derived trom hie Me cupve,. Under monopoly there is no fuch one-to-one eornespondence between price amd quatity supplied. This is becouse of thet the fact that output decision of a monopolist mot onl depends om ‘marginal cat but alo un the Shape of the demomd cupve.© Law of diminishing betunns ¢ Tho lav of de diminishing retunenie- operates #0 the short PR PUN when we cannot change oll the factor of products» Further it dudies the change. mn output by varying. he quaatty of one input. — lechmieally, the law totes thats as we Inenease the quonrity. of one input twhich ie combined with chen fixed inputs.,the manginal phgstoal productivity. of the yadiable Input must eventual. decline.Ans tothe @: No*-0% A eompetitative. Simm maximizes poofit by produelng the ax quariity, where Ma=mo. MR=Mo ts rere condition 407 profit maximization, but not suffielent condition. Because profit ma3\ qnoximigation equines MC Pising when it efiquates with MQ. When me is falling, the aost of produemg om additional umit of an output tends to decnese. Under prefect cwnipetitution, when price {s eanrtant, the difference between the toll! revenue oma toial variable veost tends 10 ymerease. ‘his happens uhen he fimn's gposs posit tends to ynenecse. But a fin ull mot inenedse he. outpub with on inanease 47086 profit In chon pum - Mace is mecessany on profit moctiniggsOn Perfect competition is velter than anonopaly for the consumers becawse ‘they will hove access to mone quantities of the goods for 0 tower price. Penjecty tampetitive tiemi y iont hove the least maniet power, which yields the mast officion high cutest. Monepblios have the, anoet aanket power, whi yields the least efficient outeame-Ane to the 4: The anginal cast curve ir U-chaped because of the relationship betucon short-run marginal phoduetion -omd cost amd long-run ‘marginal production and cost. Aw inverse ewrnetaion edicts between short pun inenease tn rnarginad units produced nd short-run deanease in manginal fixed Coot per mit. Ar a result, the ‘anginal curve 3s -V-vhaped . Fverage eect (AG) ow avenage total cost (ATC) i the per-unit cost of output. = w@ Are aq Stree, we already now that TC has two components fred east ond variable cost, that moans ATC has two aomponents -as well + auorage fed east (AFC) amd average Vorisble cast (Ave) - ‘The AFC ig the fixed cot por unit of per output amd AVC is the ov variable eost unit of output. Are = Afe +-AVE FC ees Fo ciara = ANe = "@UAW) Ransuimoner do-ndt_ pa 4+ © Mone of tre : ji both commodities consumed %9 yield | 2 geld hh her level or gatisttel the budget we (©) the consumer cam buy only one good given and. prices. a We (8) Marginal pnoduct of Jabour ie negative. 4 © $60 8. (0) Me=MR