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What is a price taker? Discuss the assumptions that are made in order to obtain the perfectly competitive model.

Define the short-run break-even price. What are economic profits at this price? Why would a firm be willing to operate permanently at this price?

An upscale bistro in a small town charges higher prices for the same menu items at dinner time than at lunch time. Does the bistro necessarily practice price discrimination? Explain your answer.

What is the social cost of a monopoly? Explain.

Explain why the amount that firms spend on advertising depends upon the characteristics of their products.

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