Answer to Question #76856 in Economics for SHEHZAAD

Question

6.1 The goal of any firm is to maximise profit, discuss the two (2) rules of profit maximisation for a firm. (15 marks)
6.2 Discuss ANY FIVE (5) features of a firm under oligopoly. (5 marks)

Answer 1

6.1 The goal of any firm is to maximise profit, so the two rules of profit maximisation for a firm are: shut-down rule (firm should cover at least its variable costs, P > AVC) and marginalist rule (marginal cost should equal to marginal revenue, MR = MC = P).
6.2 FIVE features of a firm under oligopoly are: advertising, interdependence of firms, group behaviour, barriers to entry and competition.
Source:
https://www.economicsdiscussion.net/oligopoly/top-9-characteristics-of-oligopoly-market/7342