Q1. Assume which perfectly competitive firms producing cashews discover which P exceeds MC. Will their combined output of cashews be too little, too much, or just right to achieve allocate efficiency? In the long run, Illustrate will happen to the supply of cashews and the cost of cashews? Use a supply and demand diagram to explain how explain how which response will change the total surplus (i.e., combined amount of consumer surplus and producer surplus) in the market for cashews.
Q2. Illustrate what are the relationships between strong monotone and non-satiation? Also illustrate what are the relationships between strong monotone and local satiation?