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In a society, the efficient quantity of
BUSI 1023: INTRODUCTION TO ECONOMICS FOR MANAGERSUNIT 10 EXERCISESQuestion 150 pointsDiagram 1$Price or UnitCB641E30AGMCMR200500 Quantity per weekIn a society, the efficient quantity of public goods produced is determined in the same way as theefficient quantity of production in a firm. That is, by comparing the marginal cost and marginal revenueand producing at the point where they equal each other. In hiring workers, the efficient number ofworkers to hire is at the point where the marginal revenue product (that is, price of product x no. of unitsworker produces) of an extra worker is equal to the cost or wage of that worker. To put it simply, if youpay a worker $100 per day (the Marginal Cost), once that worker continues to bring in revenue(Marginal Revenue) that exceeds his wage per day, you may continue to hire more workers. The optimalpoint is when the wage (or MC) - revenue (or MR). Note that MC = MR is an optimal point ofefficiency, and when Price - MC, this yields the most benefit to society. Let's take a look at the effect ofthese factors in competitive versus monopoly situation and answer the following questions.a. In Diagram 1 above, suppose the industry is a competitive one. What would be the price chargedand quantity exchanged? Explain how you derived your answer.b. Now, assume Diagram 1 represents an industry that is a monopoly. What would be the prevailingprice and quantity exchanged? Explain.c. Assume Diagram 1 represents an industry that is a monopoly. What would be the profit perweek? Show your calculations.MacBook Air