A firm maximises profit at the output where

marginal cost equals marginal revenue, with marginal cost rising

Normal profit is best described as

the minimum reward needed to keep the entrepreneur in the industry, treated as a cost

marginal cost eventually rises as more variable input is added to fixed capital

Bulk-buying (purchasing) discounts as the firm grows

efficiency over time through investment and innovation

a few interdependent firms must anticipate rivals' reactions

It must be able to prevent resale (arbitrage) between consumer groups

the threat of entry disciplines incumbents because barriers and sunk costs are low

cut prices (compete), giving a worse joint outcome than colluding

control mergers, prohibit cartels and prevent the abuse of a dominant position

one firm has the lowest average cost owing to large economies of scale

force real price cuts and pass efficiency gains to consumers

15questions. Pick an answer and you'll see why right away.

A firm maximises profit at the output where
Normal profit is best described as
In the short run, the law of diminishing returns explains why
A brewery buying a chain of pubs is an example of
Which is an example of an internal economy of scale?
Allocative efficiency is achieved where
Dynamic efficiency refers to
In long-run equilibrium, a firm in perfect competition earns
A defining feature of an oligopoly is that
Which condition is necessary for a firm to practise price discrimination?
A contestable market is one in which
In the prisoner's dilemma applied to two firms, the dominant strategy for each firm is usually to
Competition policy is mainly used to
A natural monopoly is usually regulated rather than broken up because
An RPI minus X price cap on a regulated utility is designed to