MGE1108 Economics for Business

Task:

Question 1

Compare the market structures of Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly under the following headings.

a.number of firms in the market

b.similarity of the products sold

c.barriers to entry

Question 2

Based on your understanding of each market structure described in Question 1, state which market structure you think each of the following businesses belong to. 

Explain your choice with a short description of which characteristics of the chosen maket structure they display. Answers with no explanation will score only half the marks. 

a.Virgin Australia in the Australian domestic air travel market .

b.A restaurant in Melbourne/Sydney CBD.

c.Academies Australasia Polytechnic

d.Yarra Tram in Melbourne or Sydney Trains in Sydney.

e.Australia New Zealand Bank.

f.Melbourne University.

g.A medical clinic in the suburbs.

h.The Village chain of cinemas.

Question 3

In Australia, Coles and Woolworth are the two major supermarket chains that dominate about 70% of the Australian supermarket business. Draw and explain a “kinked demand curve” by using this situation as an example.

Explain why firms that face a kinked demand curve are likely to engage in non-price competition

Question 4

Explain the term “price discrimination” and explain any two (2) methods of price discrimination used by firms.

Question 5

Required:

State which demand curve applies to the Monopolistic Competition firm and the other to the Oligopoly firm and explain why you think so (Hint: consider their price elasticities of demand)