Q1. Assume that Densa Inc. falls 10 percent short of producing the profit maximizing output. Would a higher product price lead to greater output? Would an increase in input prices lead to a reduction in output?

Q2. In round numbers, real output doubled 2 times in the 40 years between 1950 also 1990, so it doubled every 20 years. This means that real output grew at a rate z that solves the equation 20 = 70 / z.

Over this 40-year period, Illustrate what is the average annual rate of growth of real output? (Enter your answer here also write it down so that you can utilize it in a later question.)