Question 1) Write down the four basic market models and characteristics of each.
Question 2) Explain characteristics of a purely competitive firm and industry.
Question 3) Describe how a purely competitive firm views demand for its product and marginal revenue from each extra unit sale.
Question 4) Calculate average, total, and marginal revenue when given the demand schedule for a purely competitive firm.
Question 5) Use both total-revenue—total-cost and marginal-revenue—marginal-cost approaches to find out short run price and output which maximizes profits (or minimizes losses) for a competitive firm.
Question 6) Determine the short run supply curve when given short run cost schedules for a competitive firm.
Question 7) Describe how to construct the industry short run supply curve from information on single competitive firms in the industry.
Question 8) Describe the long run equilibrium position for the competitive firm using entry and exit of firms to describe adjustments from non equilibrium positions.
Question 9) Describe the shape of long run industry supply curves in constant cost and increasing cost industries.
Question 10) Distinguish between productive and allocative efficiency.
Question 11) Describe why allocative efficiency and productive efficiency are achieved where P = minimum AC = MC.