Q4) Answer the following, providing a graphical illustration along with your answer where necessary:

1. What is the profit maximising condition in a market with perfect competition?
2. Explain what is meant by abnormal profit? What is the adjustment process from short-run abnormal profit to long-run equilibrium in a perfectly competitive market?
3. Please find below Pricing options for firm A and B, along with individual payoffs (Firm A's payoff/Firm B's payoff)

		Firm B
Firm A		Price 2	Price 1
Price 2	20,000/20,000	10,000/24,000
Price 1	24,000/10,000	12,000/12,000

Assume you are the pricing manager at Firm A;

1. What is your payoff for a 'maximin' strategy?
2. What is your payoff for a 'maximax' strategy?
3. Does a dominant strategy exist within this prisoners' dilemma?