Question 1. How does a company in perfect competition choose the capital (K) and labour (L) requirements in the long-run? Consider both the output maximisation and cost minimisation perspectives supported by graphical and mathematical analysis in your answer.
question 2. Explain how the price and quantity supplied are determined in the market of water services, considering it is a monopoly. How would social welfare be affected if a regulation abolished the monopoly and multiple producers started supplying that market in a perfect competition regime? Consider consumer surplus, producer surplus, and deadweight loss
Question 3. Let's suppose the main UK supermarket chains operate as a non-cooperative oligopoly. Discuss which of the non-cooperative oligopoly models can best explain this market. Suppose the supermarkets were permitted to operate as a cartel. Draw a graph showing price and quantity supplied in the supermarket industry.