Law of diminishing returns and concept of economies of scale

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Question1

Explain the relationship between the law of diminishing returns and the concept of economies of scale.

Question2

Explain with the use of diagrams where appropriate how perfect competition leads to allocative productive and dynamic efficiency.

Question3

Illustrate with the use of diagrams how the profit maximizing price and output for firms in a monopolistic competitive market structure is determined.

Does the fact that monopolistically competitive markets do not achieve allocative or productive efficiency mean that there is a significant loss in economic well-being to society in these markets?

Question4

If a firm is a natural monopoly, illustrate with the use of diagrams why is it is necessary to have the price set by a regulatory authority rather than by the market.

Question5

Petro prices recently plummeted, discuss some of the reasons behind this development.

Words Limit: 1500

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Abstract: This is an individual assignment in which certain fundamentals of microeconomics are required to be analyzed such as the law of diminishing returns, perfect competition, profit maximizing price, monopolistically competitive market, monopoly market, etc Diminishing Returns is a situation which occurs in a condition of short run when one of the factors is fixed. And on the other hand if a variable factor changed to upward side; then there shall be a position comes out be less profitable and in the long run the possibility of diminishing minimal can become increases. Say for example, in above situation in one factor say capital is fixed then additional laborers will expand the level of business in the long run which is a variable factor in the market. Take another example where, in case of supply of additional specialists i.

Reference no: EM131302738

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