Study the graphs above and answer the questions that follow regarding market structure and firm behavior.

Here are the answers to your questions: 4.15. Study the graph above and answer the questions that follow. 4.15.1. The market structure depicted in the graph above is perfect competition. 4.15.2. Price is determined in the above market by the interaction of market demand (D) and market supply (S). The equilibrium price (P1) is established at the point where the quantity demanded by all consumers equals the quantity supplied by all firms in the industry. 4.15.3. If new firms enter this market: • The industry supply curve (S) will shift to the right. • This increase in supply will lead to a decrease in the equilibrium market price (P1 will fall). • The equilibrium market quantity (Q1) will increase. 4.16. Study the graph and answer the questions that follow. 4.16.1. The market structure depicted in the graph above is perfect competition. 4.16.2. The profit maximisation point in the above graph is a. 4.16.3. The demand curve in the graph (MR/AR/DD) is perfectly elastic. It is a horizontal line at the market price, indicating that the individual firm can sell any quantity at the prevailing market price without affecting it. 4.16.4. One characteristic of a perfect competitor is that there are many buyers and sellers. This means no single buyer or seller has enough market power to influence the market price. 4.16.5. Calculate the profit/loss of the individual firm above. Show ALL calculations. Step 1: Identify Price (P), Average Cost (AC), and Quantity (Q) at profit maximization. From the graph: P = R6 AC = R4 Q = 100 units Step 2: Calculate Total Revenue (TR). TR = P × Q TR = R6 × 100 units TR = R600 Step 3: Calculate Total Cost (TC). TC = AC × Q TC = R4 × 100 units TC = R400 Step 4: Calculate Profit/Loss. Profit/Loss = TR - TC Profit/Loss = R600 - R400 Profit/Loss = R200 The individual firm is making an economic profit of R200.