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Question 1:

A) In a competitive market place (pure competition) is it possible to continually sell your product at a price above the average cost of production?  Why or why not?

B) Why do marginal and average cost curves take a "U" shape?

Question 2:

Define "Monopoly".  Is it true that a monopolist will maximize profit where Marginal Revenue equals the Average Cost of Production?  Why or why not?

Question 3:

Define Elasticity.  If you have a product where elasticity is less than one, what does that mean?  Is it good, bad for the firm?

Question 4:

Why will firms not shut down as soon as the price of their product drops below the Marginal cost?  At what point will most firms go out of business (shut-down) and why?

Operating System, Computer Science

  • Category:- Operating System
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