Please note that this question requires substantial research (see the assessment criteria below).
a) Briefly describe and contrast four market structures. (Hints: Use features of each market structure such as number of sellers, type of product, entry conditions, profits and losses in the short and long run, advertising, research and development and appropriate diagrams to answer this question. While your textbook is your first point of reference, you should consult other references in order to receive full marks. Use real life examples to support your discussion). (8 marks)
b) Choose an industry from your home country representing monopoly. Explain why it is a monopoly based on the characteristics of market structures outlined in part a). Analyse price and output decisions made by this monopoly using economic theory and illustrate it on a diagram. (Hint: this is your case study that you need to describe in details, provide relevant information, use table, diagrams where appropriate. You should use real data as much as possible). (8 marks)
c) Using your case study, evaluate the efficiency of your chosen monopoly. Explain it using economic theory and illustrate it on a diagram. (Hint: compare the allocation of resources and market outcomes between your chosen industry and perfectly competitive market structure using theory and real data from your case study). (6 marks)
d) Provide the case for or against the monopoly in your case study. Would you suggest to break up this monopoly into oligopoly? Explain using economic theory and diagrams. (Hint: use real life data from your case study. For example, if the monopoly has been investing in research and development, provide evidence with supporting references). (4 marks)
Additional marks (4 marks)
Overall presentation of work, especially use of graphs, clear written expression. 2 mark
Appropriate use of referencing. 2 marks
- You must refer to the textbook in the first instance. Besides the textbook, you should also refer to a few other academic books, journal articles and relevant websites in answering these questions.
- Use in-text referencing and provide a list of references.
- All submissions for this course must use the American Psychological Association (APA) referencing style (details can be obtained at https://www.cqu.edu.au/student-life/services-and-facilities/referencing/cquniversity-referencing-guides).
- Concepts must be defined accurately and completely.
- The assumptions upon which the analysis is based must be stated at the onset.
- Diagrams must be drawn properly, correctly labelled and the relations they depict explained.
- Photocopied and scanned graphs from books, articles or websites are not acceptable. It is preferable to hand-draw a graph then scan it to insert in your file.
- Answers must be complete, addressing the specific tasks nominated in the questions.
- Remember an extension is not a gift, it is a burden.