Question 6

What are some of the basic reasons why some firms can enjoy economies of scale?

Question 7

Distinguish between the short run and long run in terms of variable inputs and fixed inputs.

Question 8

Why is it often wise for a struggling firm in a "perfect competition market structure" to continue operations if the price it receives for its product is only slightly above the shutdown point?

Question 9

What is the basic difference between an explicit cost and an implicit cost?

Question 10

When new firms enter into a perfectly competitive market, what happens to the market price, and what impact does this typically have on the future profits of both the new and already existing firms in the market?