1. Give one example each of Perfect Competition and Monopolistic Competition. (2 marks)

2. Give two similarities and two differences between Perfect Competition and Monopolistic Competion. (4 Marks)

3. Would the owner of a profit-maximizing clothing store hire another worker for $85 per day if that worker added faster service, increasing sales and revenue by $80 per day? Why or why not? Explain.

4. In a small town, two restaurants compete in the market for pizza. Each restaurant must decide whether to advertise or not. The potential monthly profits for these firms are shown below (in thousands of dollars).

Restaurant B	Restaurant A
	Advertise	Don't Advertise
Advertise	25 (A) 25 (B)	60 (A) 20 (B)
Don't Advertise	20 (A) 60 (B)	50 (A) 50 (B)

a) Does Restaurant A have a dominant strategy? If yes, what is it? Explain. (2 marks)

a) Does Restaurant B have a dominant strategy? If yes, what is it? Explain. (2 marks)