1. Explain why the following statements are true or false-:
a. Firms in a pure competition market structure make no accounting profit when the market is in a long run equilibrium.
b. If demand decreases, firms in a pure competition markets structure can make an economic profit in the short run.
c. If demand increases, firms in the pure competition market structure can make an economic profit in the long run.
d. The short run supply curve for the firm in perfect competition is that part of the firm's Marginal cost curve that is above the minimum point of the AVC curve (above the minimum value of the AVC).
e. The long run supply curve for an industry can never be down-sloping.
2. Define Short run, long run, and diseconomy of scales.
3. Draw a diagram of a general cost curve in the long run . Indicate on the curve the areas of increasing and decreasing economies of scale.
4. What is the rule for utility maximising?
5. Explain why monopoly leads to a lower output and higher price than perfect competition?