This is a Microeconomics problem.  (a) Give 2 reasons why the market structure of monopolistic competition may not necessarily require government regulation the way a monopoly market would.

3. Explain why Oligopolistic market decisions are more difficult compare to other market structures? Use a local example to support your explanation.

(Figure: The Market for Designer Boots in Monopolistic Competition IV) Use Figure: The Market for Designer Boots in Monopolistic Competition. A positive economic profit will be earned if the profit-maximizing price is in panel Price, cost XXX G; (A) H; (B) (a) O I; (C) O F; (A) ATC Quantity (per period) Price, (b) cost ATC Quantity (per period) Price, (c) cost ATC Quantity (per period)

II. Problem 1. Tennis Products, Inc., produces three models of high-quality tennis rackets. The following table contains recent information on the sales, costs, and profitability of the three models: Average Quantity Sold (Units/Month) 15,000 5,000 10,000 Variable, Cost per Contribution Current Price Total Margin Per Unit Contribution Model Revenue Unit Margin* $225,000 85,000 250,000 $560,000 A $30 $450,000 175,000 450,000 $1,075,000 $15 $15 B 35 18 17 C 45 20 25 Total * Contribution to fixed costs and profits. The company is considering lowering the price of Model A to $27 in an effort to inçrease the number of units sold. Based on the results of price changes that have been instituted in the past, Tennis Products' chief economist estimates the arc price elasticity of demand to be -2.5. Furthermore, she estimates the arc cross elasticity of demand between Model A and Model B to be approximately 0.5 and between Model A and Model C to be approximately 0.2. Variable costs per unit are…

(a) State the main features of monopoly and name any one organization which operates under monopoly.    (b) Briefly explain the ‘monopolist’s equilibrium’ in short-run with the help of a schedule.  (c) Determine the equilibrium of firm under monopolistic competition in long run

Collusion means that: a.two monopolistically competitive firms agree to keep their price lower than their competitors. b.two or more oligopolistic firms act as if they were a monopoly. c.a large number of monopolistically competitive firms decide to keep the price high to maximize collective profits. d.a monopolistic firm uses illegal means to maximize its profits.

(12) Suppose all firms in a monopolistically competitive industry were merged into one large firm. Would that new firm produce as many different brands? Would it produce only a single brand? Explain.

(b) Based on the following conditions compare pure competition, pure monopoly, monopolistic competition, and oligopoly:  (i) Flexibility of prices (ii) Expenditures on advertising and sales promotion. (iii) Efficiency in allocation of resources.

The makers of Panax pain reliever do a lot of advertising and have very loyal customers. In contrast, the makers of generic paracetamol do no advertising, and their customers shop only for the lowest price. Assume that the marginal costs of Panax and generic paracetamol are the same and constant.  (i) How might barriers to entry influence the behaviour of the makers of Panax?

How does advertising impact monopolistically competitive firms? (a) advertising always causes monopolistically competitive firms to experience lower average costs (b) it either causes a firm's perceiveddemand curve to become more elastic, or advertising causes demand for the firm's product to increase.