Economics Department

Perfect competition

 Back to essays

1)      A perfectly competitive industry initially in long run equilibrium faces a sudden drop in demand. Analyse the likely short and long run impact on price and output in both the firm and the industry.                                                                

(20 marks)

2)      Marginal costs determine output. Average costs determine profit. Discuss.

(20 marks)

3)      Perfect competition is neither realistic nor relevant to the 21^st century. To what extent do you agree with this judgement?                                                     

(20 marks)

4)      Explain the assumptions of perfect competition. How realistic are they, and to what extent does any lack of realism undermine its usefulness as a model?

(20 marks)

5)      Derive the industry supply curve in perfect competition. Under what circumstances will it be upward sloping, and at what prices will it exist?

(20 marks)