Refer to a graph of the supply curve. Draw a graph which shows the monopolist's demand curve, its marginal revenue curve, its marginal cost curve, and its average total cost curve. On your graph, indicate the quantity the monopolist produces, the price it charges, the monopolist's profits, and the dead-weight loss the monopolist generates. Consider a perfectly competitive industry that produces a good called widgets. The industry is composed of 18 buyers, each with the following dollar value for a widget, and 18 sellers, each with the following dollar cost of producing a widget.
Buyers have no value for a second widget, and producers can produce no more than one widget each.
Show and explain your work. Explain, with reference to a supply and demand graph for loans in the Federal Funds market. Consider the Lucas Island economy.