1. Analyze the link between a firm’s production process and its total costs. What are the different types of costs a firm faces in the short run and long run.
2. What are the major differences in perfectly competitive firm and monopoly. List and explain at least four such difference. What criteria a firm will use to produce certain quantity of output.
3. Explain why a perfectly competitive firm earns profit in the short run but not in the long run as compared to monopoly which earns profits both in the short and long run.