Question 1
Red T-shirts is a small business manufacturing custom-made t-shirt. The cost structure of the firm is presented in the table below:

[i] Calculate the short-run costs by completing the above table. 

[ii] From the above table, draw AC, MC, AVC, AFC curves.

[iii] Analyze the relationship between MC and AC curves.

Question 2   
[i]     There is a convenience store located in the same building as OPAIC. Your classmate wants to classify this type of business in economic terms. Go there and help your friend identify the market structure to which this business may belong. Justify your answer with any four reasons.

[ii]     ASB Bank is located at 138-142 Queen Street. Your classmate wants to classify this type of business in economic terms. Go there and help your friend identify the market structure to which this business may belong. Justify your answer with any four reasons.

[iii] Your classmate asked for your help to identify the market structure to which Auckland Airport may belong. Help your friend identify the market structure to which this business may belong.  Justify your answer with any four reasons.

[iv] Economics books mention that certain requirements must be met for a market to be perfectly competitive. Identify any four essential features of the perfectly competitive market. Why do you think it is difficult to find a real life example of the perfectly competitive market?

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