Microeconomics –
References are required.
Question1
Explain the relationship between the law of diminishing returns and the concept of economies of scale.
Question2
Explain with the use of diagrams where appropriate how perfect competition leads to allocative productive and dynamic efficiency.
Question3
Illustrate with the use of diagrams how the profit maximizing price and output for firms in a monopolistic competitive market structure is determined.
Does the fact that monopolistically competitive markets do not achieve allocative or productive efficiency mean that there is a significant loss in economic well-being to society in these markets?
Question4
If a firm is a natural monopoly, illustrate with the use of diagrams why is it is necessary to have the price set by a regulatory authority rather than by the market.
Question5
Petro prices recently plummeted, discuss some of the reasons behind this development.
Words Limit: 1500