‘Both short-run and long-run average cost curves may be -shaped, but the explanations for their respective shapes are quite different.’ Explain this statement.
Answer to relevant QuestionsWhy do marginal cost curves intersect both the average variable cost curve and the average cost curve at their lowest point?Why is the profit-maximising price under monopoly greater than marginal cost? In what way can this be seen as inefficient?Think of two examples of price discrimination. In what ways do the consumers gain or lose? What information would you need to be certain in your answer?Is mark-up pricing likely to benefit consumers?Consider the cases for and against a poll tax.
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