Carefully define the long-run average total cost curve of firms and explain, using a diagram, the reason for its typical shape.

Explain why the price elasticity of demand for many primary commodities is relatively low while the price elasticity of demand for manufactured products is relatively high.

Discuss the consequences of providing a subsidy on the stakeholders in a market.

Explain why the opportunity cost of entrepreneurship, an element of normal profits, is part of the economic costs of a firm.

Explain, with the help of diagrams, (i) how the market for beer will be affected by a tax on hard liquor such as whisky and vodka, (ii) how the market for oranges will be affected if farmers can sell lemons at a higher price, (iii) how the demand for red wine will be affected if its price decreases.

Explain, using diagrams, under what conditions and in which market structures positive economic profits are unlikely to persist in the long run.

Explain why governments provide subsidies, and describe examples of subsidies.

Suppose a company has fixed costs of $\$ 28,000$ and variable cost per unit of $\frac{2}{5} x+222$ dollars, where $x$ is the total number of units produced. Suppose further that the selling price of its product is $1250-\frac{3}{5} x$ dollars per unit.

(a) Find the break-even points.

(b) Find the maximum revenue.

( c ) Form the profit function from the cost and revenue functions and find maximum profit.

(d) What price will maximize the profit?

Explain, using appropriate diagram(s), why, despite the absence of supernormal profits in a monopolistically competitive market, firms achieve neither allocative efficiency, nor productive efficiency.

Draw a diagram to illustrate $3$ rd degree price discrimination in airlines, explaining when the prices charged in the two markets you chose will differ more.

Explain what price, income and cross elasticities of demand measure.

Explain the conditions that need to be satisfied for a firm to successfully adopt price discrimination.

Discuss, using diagrams wherever appropriate, the significance of price elasticity of demand for both firms and the government.

Discuss three policies that governments might implement to reduce negative externalities associated with the environment.