1. a) Explain how profit is determined in perfect competition.
b) “Whatever the type of market structure, profit maximization will always be the only goal of firms.” Discuss. (06?)
- With the help of a diagram, explain when a firm should shut down in the short run.(Paper 2, Nov 2007)
- Explain why the marginal revenue curve is identical to the average revenue curve for a firm in perfect competition but not identical for a monopoly. (May 2009)
- a) Explain the difference between short-run equilibrium and long-run equilibrium in monopolistic competition.
b) Perfect competition is a more desirable market form than monopolistic competition. Discuss (Nov 2007).
- Paper 3, sub-question b: Using an appropriate diagram, explain how a firm in monopolistic competition can earn abnormal/economic profit. (May 2009)
- Paper 3, sub-question d: Using information from the text/data and your knowledge of economics, evaluate the costs and benefits of monopolistic competition for consumers and producers. (May 2009)
- Explain the level of output at which a monopoly firm will produce
- Using a diagram, explain the concept of a natural monopoly (Paper 2, Nov 2007)
- a) Explain the barriers to entry that allow a firm to be a monopoly.
b) Evaluate the view that governments should always prevent firms from being monopolies
- A perfectly competitive industry is turned into a monopoly. Predict the effect on price and output
- A monopoly firm decides to maximize revenue rather than profit. Use a diagram to explain what will happen to price and quantity. (Paper 2, Nov 2006)
- a) Explain how barriers to entry may affect market structure.
b) Evaluate the view that monopoly is an undesirable type of market structure. (May 2007)
- a) “Monopoly price is higher and output smaller than is socially ideal. The public is the victim”. Explain the economic reasoning behind this statement.
b) Do you agree that the public is always the ‘victim’ of monopoly? Justify your answer. (Paper 1, 2000)
- a) Outline the ways in which monopoly power might arise.
b) Should governments seek to control the growth of monopoly power?
- a) Explain how a firm operating in an oligopolistic market might attempt to increase its market share.
b) Evaluate the view that producers, and not consumers, are the main beneficiaries of oligopolistic market structures (Paper 1, May 2008)
- Explain why prices tend to be relatively stable in a non-collusive oligopoly. (May 2009)
- Explain the nature of competition in a non-collusive oligopoly. (Nov 09)