Question: Question 5 : a)Explain the differences between economic profit and accounting profit. Provide empirical empirical examples in your answer. b)Explain the relationship between Total Product,

Question 5 :

a)Explain the differences between economic profit and accounting profit. Provide empirical empirical examples in your answer.

b)Explain the relationship between Total Product, Marginal Product and Average Product of labour to the total cost, average total cost and Marginal cost of production.Show how profit maximization is determined by the firm. ( 30 marks)

c)Discuss clearly by graphical presentation and empirical examples the influence of the following on the cost and production of the firm:

(i) changes in technology

(ii) changes in the price of factors of production

(20 marks)

d)Clearly explain by graphical presentation and empirical examples of the following:

(i)Economies of scale

(ii)Diseconomies of scale

(iii)Constant return to scale

(30 marks)

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