Price and cost per unit P Demand MR Quantity 1. Identify the profit area. (eg: P1cbP3) 2. What is the minimum efficient scale of output? 3. What is the excess capacity? 4. What would be the output if the industry were perfectly competitive?Price and 20 11 S 750 1,160 1,350 1,800 Quantity Refer to Figure 12-11. Suppose the prevailing price is $20 and the firm is currently producing 1,350 units. In the long-run equilibrium, the firm will produce 750 units O conntinue to produce 1,350 units 1,800 units 1,100 unitsIf the demand for a life-saving drug was perfectly inelastic and the price doubled, the quantity demanded would also double be cut in half decrease by 50%. remain constantIf the cross elasticity of demand between beef and bison is 1.5, then a 3 percent increase in the price of beef will lead to a in the quantity of bison demanded. 2 percent increase 4.5 percent increase 4.5 percent decrease 2 percent decrease