Loading subjects
Market structures and marginal analysis · Part 1 of 4
6 exam-style questions with model answers, plus 7 quick multi-choice questions — every question on this part of the standard, grouped by the 2 pages of notes they come from.
Write a full answer before you reveal the model one. That comparison is where the learning happens.
Explain the difference between a fixed cost and a variable cost, giving an example of each.
Explain in detail why the marginal cost curve intersects the average cost curve at the minimum point of average cost.
Compare and contrast the revenue curves of a perfectly competitive firm and a monopoly, and explain how the difference between them affects each firm's pricing decision. Refer to cost and revenue models in your answer.
A firm is producing at an output where MR < MC. Using marginal analysis, explain what the firm should do.
Explain in detail how a monopoly determines its profit maximising price and quantity, and why the price it charges is above marginal cost.
Demand falls for a monopoly. Using marginal analysis, compare and contrast what happens to the firm's output, price and profit in the short run and in the long run. Refer to a cost and revenue model in your answer.