1. i. What are the characteristics of a perfect competition?

Sketch a curve
to illustrate how price is determined in a perfect competition.
ii. What will happen to the price if there is an increase in demand in a
competitive market? Draw suitable graphs to illustrate this.

2. If firm get?
ii) Using the
iii) How much profit will a the short run?
iv) If the price falls at RM5, will the firm be able to operate in the short
run?

3. i. A perfectly competitive firm produces 1,000 units of burger in

marginal revenue is RM6. Calculate the firm's average fixed cost, long
run average cost, total and total profit.
ii. Plot a graph for a competitive market in the short run

4. i. It is the durian season and there are many sellers selling durians in
the market. With the assumption that all durians are identical,
explain the situation by plotting a graph.
ii. A manager of Tanah Periuk Company makes a statement that in
order to maximize profits, we should operate at a minimum average
total cost. Is the manager's idea a good one?

5. i. Based on a market selling chicken, explain why in the short run, the
competitive market firm enjoys a super normal profit and in g run,
the firm derives a normal profit.
ii. State the characteristics of a monopoly

6. For each of the statement below, plot a graph to show the firm's profit or loss
(if any).
i. A profit-maximizing monopoly in the short run making a positive
economic profit.
ii. A loss-minimizing monopoly in the short run which has shut down.
iii. A loss-minimizing monopoly in the short run which is operating but
losing money.

7. Based on the table below

Quantity Price Total Cost
1 60 18
2 58 20
3 54 24
4 48 30
5 40 38
6 28 50
7 14 70
 i. Calculate MC and MR
ii. Determine the quantity produced by the
iii. How much does the firm earn in terms
iv. What is the average cost of the firm?
v. Sketch the AC, AR, MR and MC curve without a scale.

8. The diagram below shows the short equilibrium of a monopoly

i. Determine the quantity and price of the firm.
ii. calculate the total cost and total revenue of the firm.
iii. Calculate to determine whether the firm secures a profit or suffers a
loss.
iv. Calculate the new total revenue and determine whether there is a
profit based on the same quantity and cost of the firm but with a
price change to RM50.

9. i. Compare a perfectly competitive market and monopoly by sketching a

suitable graph
ii. Will an increase in the demand for a monopolist’s product always
result in a higher price? Explain by using a suitable graph

10. i. What are the characteristics of a monopolistic competition?

ii. Based on a suitable diagram, what are the possible conditions for a
monopolistic market in the short run and how do these conditions
arise.

11. i. Explain the difference between a perfectly competitive market and a

monopolistic market using a suitable graph.
ii. What are the characteristics of an oligopolistic competition

12. MAXIS, CELCOM and DIGI are large telecommunicatio product firms.
MXXY is a new company that is entering th telecommunication market.
After operating a few months, the company has to shut down. Using the
theory of economics explain some of the problems that the new firm may hav
encountered.

13. By using an appropriate diagram, compare the price of a monopolistic and

monopoly market if these two firms produce at the same quantity?