can all of these please be solved, take all the time that you need. 5. Plot Airbus' profit curve, lable the profit-maximizing quantity Q* and profit *.6. Facing increased demand as the pressure of the pandemic eases up, the market price of this planehas increased to $70. Create the same table for the same quantities. What is Airbus' profit-maximizingquantity now?7. Using the two pairs of price and quantity you got from parts 2 and 6, graph the supply curve of theAirbus A350, and derive the supply function.E. Perfect Competition1. Please explain why the marginal revenue curve for a perfectly competitive firm is horizontal.2. Suppose a firm is making positive profit in a perfectly competitive market. Use whatever graphs youdeem necessary, discuss how this industry will moves toward long run equilibrium.3. Suppose a firm is making negative profit in a perfectly competitive market. Use whatever graphsyou deem necessary, discuss how this industry will moves toward long run equilibrium.4. In the long run, perfectly competitive firms make zero economic profit. If this is the case, why doesthe firm even bother producing? Why not exit the market completely?F. Highgarden was the seat of House Tyrell and is the regional capital of the Reach, which is the mostfertile part of Westeros, supplying the rest of the realm (especially King's Landing) with grain, fruit, wine,and livestock. Such large-scale agriculture industry has led to a competitive fertilizer market. Supposethe market for fertilizer in the Reach is perfectly competitive. Firms in the market are producing at theirprofit-maximizing output but are currently incurring economic losses.1. How does the price of fertilizer compare to the average total cost and the marginal cost of producingfertilizer?2. Draw two graphs, side by side, illustrating the present situation for the typical firm and for themarket as a whole.3. Assuming there is no change in either demand or the firms' cost curves, how will the market adjustin the long run? Explain what will happen in the long run to the price of fertilizer, marginal cost, averagetotal cost, the quantity supplied by each firm, and the total quantity supplied to the market. Problem Set 4A. A consumer's utiltiy function for goods x and y is U(x, y) = x+y. She has $30 of income and the priceof good x is $2 while the price of good y is $3.1.Graph this consumer's budget constraint.2. Graph this consumer's indifference curves at Ū = 5, Ū = 10, and Ū = 15.3. What is this consumer's optimal consumption bundle?4. For this consumer, how are goods x and y related? Why does this make sense?B. As we showed in class, an interior optimal consumption bundle occurs when the indifference curve istangent to the budget constraint, meaning the two curves have the same slope, thus the marginal rate ofsubstitution is equal to the price ratio of the two goods. This implies thatMU1P₁MU2P2In words, please describe why this condition must be true.C. As we showed in class, a firm's profit-maximizing production occurs when marginal revenue is equal tomarginal cost.1. Discuss what would happen if the firm is producing at a quantity where MR MC. What can thefirm do to raise profit? Explain your reasoning.2. Discuss what would happen if the firm is producing at a quantity where MR

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can all of these please be solved, take all the time that you need. 5. Plot Airbus' profit curve, lable the profit-maximizing quantity Q* and profit *.6. Facing increased demand as the pressure of the pandemic eases up, the market price of this planehas increased to $70. Create the same table for the same quantities. What is Airbus' profit-maximizingquantity now?7. Using the two pairs of price and quantity you got from parts 2 and 6, graph the supply curve of theAirbus A350, and derive the supply function.E. Perfect Competition1. Please explain why the marginal revenue curve for a perfectly competitive firm is horizontal.2. Suppose a firm is making positive profit in a perfectly competitive market. Use whatever graphs youdeem necessary, discuss how this industry will moves toward long run equilibrium.3. Suppose a firm is making negative profit in a perfectly competitive market. Use whatever graphsyou deem necessary, discuss how this industry will moves toward long run equilibrium.4. In the long run, perfectly competitive firms make zero economic profit. If this is the case, why doesthe firm even bother producing? Why not exit the market completely?F. Highgarden was the seat of House Tyrell and is the regional capital of the Reach, which is the mostfertile part of Westeros, supplying the rest of the realm (especially King's Landing) with grain, fruit, wine,and livestock. Such large-scale agriculture industry has led to a competitive fertilizer market. Supposethe market for fertilizer in the Reach is perfectly competitive. Firms in the market are producing at theirprofit-maximizing output but are currently incurring economic losses.1. How does the price of fertilizer compare to the average total cost and the marginal cost of producingfertilizer?2. Draw two graphs, side by side, illustrating the present situation for the typical firm and for themarket as a whole.3. Assuming there is no change in either demand or the firms' cost curves, how will the market adjustin the long run? Explain what will happen in the long run to the price of fertilizer, marginal cost, averagetotal cost, the quantity supplied by each firm, and the total quantity supplied to the market. Problem Set 4A. A consumer's utiltiy function for goods x and y is U(x, y) = x+y. She has $30 of income and the priceof good x is $2 while the price of good y is $3.1.Graph this consumer's budget constraint.2. Graph this consumer's indifference curves at Ū = 5, Ū = 10, and Ū = 15.3. What is this consumer's optimal consumption bundle?4. For this consumer, how are goods x and y related? Why does this make sense?B. As we showed in class, an interior optimal consumption bundle occurs when the indifference curve istangent to the budget constraint, meaning the two curves have the same slope, thus the marginal rate ofsubstitution is equal to the price ratio of the two goods. This implies thatMU1P₁MU2P2In words, please describe why this condition must be true.C. As we showed in class, a firm's profit-maximizing production occurs when marginal revenue is equal tomarginal cost.1. Discuss what would happen if the firm is producing at a quantity where MR > MC. What can thefirm do to raise profit? Explain your reasoning.2. Discuss what would happen if the firm is producing at a quantity where MR< MC. What can thefirm do to raise profit? Explain your reasoning.D. The Airbus A350, first entered service in January 2015 with Qatar Airways, is one of the most techno-logically advanced passenger airplanes today. Made largely of carbon fibre reinforced polymer, its high fuelefficiency makes it a popular choice of long-range airliner for airlines. Suppose Airbus' production functionfor this plane is C = 20 +5Q², and the plane is sold at a price of P = $50.1. Create a table detailing Airbus' total cost, average total cost, marginal cost, total revenue, marginalrevenue, and profit for each quantity between 0 and 10 of the A350.2. What is Airbus' profit-maximizing quantity for the A350? How much profit does Airbus make?3. Plot Airbus' marginal cost, marginal revenue, and average total cost curves, lable the profit-maximizingquantity Q*, and the area of company's profit.4. Plot Airbus' total cost and total revenue curves, lable the profit-maximizing quantity Q*.

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