Economics Assignment: the impact the law of diminishing marginal returns
Target Word Limit: 1200 words
Format: Question and Answer
Referencing Style: Harvard (Minimum 8 references required)
Response should be approximately in 1,200 words or equivalent in total.
1. Explain the impact the law of diminishing marginal returns has on both marginal cost and average total cost.
2. With the aid of a diagram explain the long run average cost curve and the influences upon it.
3. Explain the concept of profit maximisation where marginal cost equals marginal revenue.
4. Making references to the UK energy market for electricity and gas:
(a) describe the characteristics of an oligopoly
(b) with reference to the theory of oligopoly explain the price and output behaviour of the large UK energy firms
5. Explain why firms cannot make supernormal/abnormal profits in the long-run in a perfectly competitive market. Your response should make reference to the characteristics of a perfectly competitive market, and contain one or more diagrams to support your explanation.
6. There are many alternative theories to profit maximisation, explain one such theory.
Note: A bibliography of sources should be provided (Harvard referencing).