(a)[12]
Describe how a firm is said to operate in order to maximise profits. Consider whether it will cease to operate if total revenue does not cover total cost.
(b)[13]
Some large supermarkets advertise that they ‘price match’ other major supermarkets, setting the same prices for the same brands of products as their rivals. Analyse how firms are said to behave in oligopolistic markets. Discuss how far this is supported by the above statement.