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12 marksMarket Structure

CAPE Economics Unit 1 · 2010 · Paper 2 · Question 3(b)

With the aid of a short-run diagram and a long-run diagram, explain output level, pricing (relative to AR, ATC, and MC), and the profits of the firm in monopolistic competition in both the short run and the long run.

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Other parts of this question

  1. 3(a)(i)Compare the characteristics of monopolistic competition with those of oligopoly, focusing on the number of firms, entry and exit barriers, and the nature of…[9 marks]
  2. 3(a)(ii)Assess the role of advertising in monopolistic competition.[4 marks]

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