(a)[12]
Explain why profit levels may differ within perfect competition and also between perfect competition and monopoly.
(b)[13]
Discuss whether average variable cost has any importance in a perfectly competitive market structure in deciding (i) the output produced by a firm and (ii) the profit of a firm.
- Discuss whether average variable cost has any importance in deciding the output produced by a firm in perfect competition. [6]
- Discuss whether average variable cost has any importance in deciding the profit of a firm in perfect competition. [7]