1) Explain what the deadweight loss of a non-discriminating monopoly is with words and graphs.
2) Why is the long run equilibrium under perfect competition more effecient than monopoly?
3) Draw a graph of a market for a firm in a perfectly competitive industry. Indicate the short run profit maximizing quantity and the profits for the firm. Explain with equations.
4) Explain with the help of graphs how a firm minimizes costs in the long run. Answer is worth 5 points.