The diagram below represents the Long Run Equilibrium of a firm in Perfect Competition - Leaving Cert Economics - Question 1 - 2013

1. The output the firm will produce in equilibrium (label Q1) is where the Marginal Cost (MC) meets the Marginal Revenue (MR).
2. The average cost of producing this output (label C1) is given by the Average Cost curve at Q1.
3. The price it will charge for this output (label P1) corresponds to the price level on the Demand curve at Q1.

Homogenous goods refer to products that are identical in nature and quality, meaning that they are perfect substitutes for each other. In perfect competition, consumers cannot differentiate products from different producers, ensuring uniform pricing.

1. Many buyers and sellers are present in the market, ensuring no single entity can influence the market price.
2. Free entry and exit into the industry allows firms to enter when profits are available and exit when losses occur.

1. Many buyers and sellers: A large number of participants ensures competition, preventing any single seller from dominating the market or influencing prices.
2. Free entry and exit: This characteristic maintains market efficiency, as firms can respond to market signals without barriers to entry.

One reason for the increase in petrol and diesel prices is the rising international prices. Global supply chain disruptions and increased demand can lead to higher costs in international markets which are passed down to consumers.

For Irish motorists, high petrol and diesel prices can lead to cutbacks in the number of journeys taken, as consumers try to manage their transport costs effectively. Additionally, they may switch to more economical vehicles to reduce overall fuel expenses.

In the Irish economy, high fuel prices can increase transport costs, leading to inflation. This situation happens as suppliers adjust prices to cover increased transportation expenses, eventually passing the higher costs onto consumers and reducing disposable income.

1. Decrease indirect taxation: Reducing VAT on petrol and diesel could lower prices for consumers directly.
2. Reduce costs associated with vehicle maintenance: Lowering taxes on car repairs could alleviate the financial burden for motorists, making it easier to manage transportation expenses.