Microeconomics

Individual Assignment for TECO601: Microeconomics This assignment consists of 10 questions, 20% of full mark (or equivalent to 20 marks). This assignment should be submitted via Turnitin till 16/08/2020 at 1 1:55pm. To answer the following questions, students should use a sum of relevant economic theories (if require) for the justification of their answers. Students can also use figures (i.e., supply and demand curves) for presenting their answers. Question 1: a) Explain the profit maximisation strategy for perfectly competitive firm. (1 mark) b) A perfectly competitive firm (Top Pizza) is selling pizza in Sydney market whose marginal cost (MC), average variable cost (A VC), and average total cost curves (ATC) are shown in the diagram below, Price $/slice MC ATC AVC 2.5 N 1.8 1.6 1.2 250 400 Q slices/day a. Determine the profit-maximising level of output at a price of $2.50 using the above diagram. (1 mark) b. At the profit maximising level of output, calculate how much profit will this producer earn if the price of pizza is $2.50 per slice? (1 mark)