1.5 Theory of the Firm

Definitions

Interactive Graph Resources (big thank you to Econgraphs!)

  1. Monopoly Profit Maximisation Curves
  2. Perfect Competition Cost Curves

Essay Questions

Distinguish between decreasing returns to scale and the law of diminishing returns. [10m]

Discuss the view that greater economic efficiency will always be achieved in perfect competition as compared to a monopoly. [15m]

Explain the necessary conditions for price discrimination to take place. [10m]

Discuss the advantages and disadvantages of price discrimination for consumers and producers. [15m]

Explain the differences between monopolistic competition and oligopoly as market structures.  [10m]

Discuss the differences between a collusive and a non-collusive oligopoly. [15m]

2 comments

  1. You guys are amazing, thank you so much for dedicating your time into doing this, it is much appreciated!! 🙂

  2. Mark Glew · · Reply

    Hi Ruru – Mark Glew here!! One of my current IB Economics students downloaded one of your essays and recommended your website (small world). I hope you are well – obviously keeping yourself busy !!

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