C. Draw the graphs for a perfectly competitive firm and a monopolistically competitive firm that are operating in the short run.

What are the similarities and differences? (

D. Draw the graphs for a perfectly competitive firm and a monopolistically competitive firm that are operating in the long run.

What are the similarities and differences?

2. Firm Production, Costs, and Revenue

A. How do firms use marginal analysis to analyze production?

B. Draw a graph of the different short-run costs faced by a firm.

Describe and compare these costs.

C. Draw a graph depicting economies of scale, constant returns to scale, and diseconomies of scale.

) Explain the meaning of each.

3. Government Action

A. Describe market failures, and explain why market failures lead to government intervention.

D. What is the government doing when it provides a public good such as national defense?

E. Why does the government impose fines on firms that create pollution as a byproduct of their production?