1 Explain the impact the law of diminishing marginal returns has on both marginal cost and average total cost.

2 With the aid of a diagram explain the long run average cost curve and the influences upon it.

3 Explain the concept of profit maximisation where marginal cost equals marginal revenue.

4 Making references to the UK energy market for electricity and gas:

With reference to the theory of oligopoly explain the price and output behaviour of the large UK energy firms

5 Explain why firms cannot make supernormal/abnormal profits in the long-run in a perfectly competitive market. Your response should make reference to the characteristics of a perfectly competitive market, and contain one or more diagrams to support your explanation.