Production Possibility Curve (PPC) is concave to the origin because of the increasing opportunity cost. As we move down along the PPC, to produce each additional unit of one good, more and more units of other good need to be sacrificed. That is, as we move down along the PPC, the opportunity cost increases. And this causes the concave shape of PPC.

In the above graph, AE represents the PPC for capital goods and consumer goods. Suppose the initial production point is B, where 1 unit of capital goods and 48 units of consumer goods are produced. To produce one additional unit of capital good, 4 units of consumer good must be sacrificed (point c). Thus at point c, the opportunity cost of one additional capital good is 4 units of consumer goods. On the other hand, at point D, the opportunity cost of producing one additional unit of capital good is 9 units of consumer goods. Thus, as we move down the PPC from point C to point D, the opportunity cost increases. This confirms the concave shape of PPC.

Here the price elasticity of demand is (-1). In unitary elastic, quantity demanded changes by exactly the same percentage as price does.
Here number of units initially demanded is 8 @ Rs 7 per unit.
Total price =8*7 = 56 Rs
If the price rise to Rs 8 per unit with a price elasticity of -1, the quantity demanded will be 56/8 = 7 units.

In economics, cost means those payments which must be received by resource owners in order to ensure that they will continue to supply the resources for production.
The economic costs are based on a common principle which is called opportunity cost. It is the opportunity loss of not being able to produce some other product.
Economic cost includes explicit costs, implicit costs and normal profits. Example, wages to labourer, rent to land lord, profit to entrepreneur, interest to capital etc.
Explicit cost: Explicit costs are opportunity costs that involve direct monetary payment by producers. The explicit opportunity cost of the factors of production not already owned by a producer is the price that the producer has to pay for them.
Implicit cost: Implicit costs (also called implied, imputed or notional costs) are the opportunity costs not reflected in cash outflow but implied by the failure of the firm to allocate its existing (owned) resources, or factors of production to the best alternative use.

When a firm can sell more only by lowering the price the AR curve is downward sloping. When AR is falling, MR must be less than AR. Therefore, MR curve lies below the AR curve.

An important feature of a perfect competition is freedom of entry and exit to the firms. An entrepreneur who has the necessary capital and skill can start any business of his choice. In every industry, new firms are therefore opened from time to time.
Similarly in a market of perfect competition, any existing producer is free to close down his business if he so choose. As a result, some firms are going out of industry. Since there is no hindrance to the entry of new firms and exit of existing firms, the total number of firms under perfect competition remains very large.