In: Economics
Question 2
2.1.
Using average and marginal cost curves and
average and marginal revenue curves show a firm in a perfectly
competitive market in short run making and
maximising its profit. (Draw a diagram and explain it.)
2.2.
Using average and marginal cost curves show
a firm in a monopolistically
competitive market making a loss whilst simultaneously behaving
rationally in the
short run. (Draw a diagram and explain it.)
2.3. Explain the Prisoner’s Dilemma. (You can use a pay-off matrix if you wish.)