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Q1. Few markets in the real world have the characteristics of a perfectly competitive market. Does that mean that the predictions of the model of perfect competition are not very useful in predicting how markets in the real world work? Discuss.
Q2. ‘Profit is the maximum value a company can distribute during the year and still expect to be worth as much at the end of the year as it was at the beginning.’ Discuss this statement, and comment on its value in measuring profit for decision-making.
Q3. As a manager, would you prefer your business to be in a monopoly position or a perfectly competitive market? Why? Support your views with examples.
Q4.Why is it that, in the short-run, after a certain number of workers has been hired, output increases by less and less with each additional worker hired? Illustrate your answer with an example. Would there be any circumstances under which this phenomenon would not occur?
Note: For all your answers support your views/opinions with at least two to three scholarly references, and a word count of 400-500 words for each answer.
Learning Resource: Chapter 5 &6 of the Text Book O’Sullivan, A., Sheffrin, S. M., & Perez, S.J. (2014).Survey of Economics: Principles, Applications, and Tools. (6th).Upper Saddle River, NJ: Pearson Education. Print version: ISBN-10: 0-13-294885-0 or ISBN-13: 978-0-13-294885-2.Digital version: ISBN-13:978-0-13-13-9370-7.