Explain why despite decreases in marginal cost, Microeconomics

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Problem 1:

How can a manager of a supermarket maximise total revenue using various concepts of elasticity of demand? Use examples to illustrate.

Problem 2:

What are the distinguishing features of a market where firms are price takers? How would such a market characterized by imperfect competition? Use diagrams where appropriate.

Problem 3:

It is observed that some firms keep making profits in the long run despite no barriers to entry. Explain the reasons and possible strategies for such persistence.

Problem 4:

How can firms extract consumer surplus from their customers? Use examples to illustrate.

Problem 5:

(a). Explain why despite decreases in marginal cost, price may remain unchanged in an oligopoly setting. Use example to illustrate.

(b). Explain how equilibrium is reached in a Cournot model. Illustrate why would firms in such a model wish to collude? Use examples to illustrate.

(c). What factors can affect the decisions to sustain collusive agreements?


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