Question: 1. Using appropriate diagrams, show and briefly explain that consumption efficiency is achieved when allocation of resources happens at a point where marginal rate of

1. Using appropriate diagrams, show and briefly explain that consumption efficiency is achieved when allocation of resources happens at a point where marginal rate of substitutions are equal for all individuals (17 marks)

2. Suppose the demand function facing a monopolist is given by P = 100 - 2Q. The monopolist produces its product at a constant marginal and average cost of RM20. Find the profit maximizing quantity and price for this monopolist. Calculate its profit. (8 Marks)

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