1. We will use graphical analysis extensively in our course occasionally supplemented by some mathematics. Given a graph of a line, it's relatively easy and very helpful to derive the equation of the line. For each of the three lines below, enter the equation of the line. Demand, marginal revenue, and marginal cost are essential elements of many microeconomic models, but it is not necessary to define what the line represents yet. For this problem, these are just convenient labels for the lines (linear curves).The generic equation for a line is:Y = a + bX where ais the Y axis intercept and b is the slope of the line (rise/run). For these graphs, price (P) is measured on the Y-axis and quantity (Q) is on the X-axis.

1. By inspection of the graph, what is the price and quantity at which MR = MC?

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1. Enter the equation for demand

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1. Enter the equation for marginal revenue

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1. What is the slope of the marginal revenue compared to demand?

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1. Enter the equation for marginal cost

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1. At what Price and Quantity does MR = MC? (Set the equation for marginal revenue equal to the equation for marginal cost and solve for Q. Then plug Q into either equation to find P. Show your computation).Your answer should agree with the answer in part a above.

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