1. Why is constant return to scale incompatible with perfect competition? 2 What is price discrimination? What are the necessary conditions of price discrimination? What companies use price discrimination? 3. Consider the following production function q=2VT.+ 3VR a Assume K = 16, derive the marginal product schedule for L. What direction is it moving? b. What returns to scale does the production function exhibit? Explain Let w $4.-$2, and K 16; for the given values of a determine average fixed costs, average variable costs, average total costs and marginal costs: KL AFC AVC ATC MC 12 16 16 16 16 16