Q1. Describe the concept of returns to scale with the assist of expansion path.
Q2. Describe the shape of the long run average cost curve if production is subject to:
c) Decreasing returns to scale.
Q3. When a specific tax is imposed then illustrate that from the buyer’s point of view price increases and from the seller’s point of view price falls.
Q4. Let consider a perfectly competitive market for wheat. Determine the impact of a price support program on quantity demanded and quantity supplied. Do you think that the price support is accountable for overproduction?
Q5. describe why a producer under perfectly competitive market conditions is for all time a price taker.