Part Four: Models and Debate (35 Points)
First, answer question number one to discuss how models are used as an analytic tool in microeconomics. Then, select two of the remaining questions and in no less than 250 words debate how it is used as an analytic tool in microeconomics.
1.) Output, Price, and Profit: The Importance of Marginal Analysis
The following graph illustrates a firm's profits in perfect competition. Using the graph describe how-to calculate the following:
The firm's profit per unit of output
The firm's total profit
Revenue and Cost (Per Bushel)
$3.00
$2.25
$1.50
0
MC AC
50,000 Bushels of Corn
(Per Year)
D=MR = AR