1. A classic example of monopolistic competition is the restaurant industry. In what ways does this industry show the characteristics of the monopolistic competition market?
2. Wendy says, "If the amount of product differentiation in amonopolisticallycompetitive industry is very small, the outcome in that market will not be very different than if it were a perfectly competitive industry." Explain if Wendy is correct and how you would respond to her reasoning.
3. The duopolist dilemma is that each firm would make more profit if both picked the _______ price, but both firms pick the _____ price. Explain why they do this.
4. What are the characteristics of an oligopoly? Using the concept of duopoly and the price leadership model, discuss demand and pricing strategies in an oligopolistic market structure.
5. Critical Thinking: Most of the products you buy at a grocery store come from what type of competitive market? Why do you think this is so? Note; the question is not about grocery stores, but the products you find there. Think about a few examples of product you regularly purchase, like canned vegetables, breakfast cereal, toothpaste, etc.
6:Continental and United Airlines merged a few of years ago. This had an impact on everyone that travels. Southwest Airlines has merged with Air Tran, Delta and Northwest Airlines merged, and American Airlines merged with US Airways. Did the government review these mergers to see if there are potential issues before allowing them? If so, under what acts did that review occur? What are some of the potential problems with allowing two large airlines to merge thus becoming the largest airline in the US in the case of American and US Airways, and the largest discount airline in the case of Southwest and Air Tran? In what market type do airlines operate?
Related to that, KFC, Taco Bell, Long John Silvers, Pizza Hut, and A & W Restaurants are competitors, but are actually all part of Yum Brands, Inc. Kay Jewelers, Zales, and Jared Jewelers are competitors, but are actually part of the same company, Sterling. Merged companies with subsidiary and parent companies confuse the market place, the investor, and the consumer. Should the relationship between companies be more transparent?
Please do this in your own words no copy paste and If I am not satisfied I will reject the answers. Just want to let you know in advanced.