1. 'Neither empirical evidence nor theoretical logic offers any justification for the persistence of the dominant position of the kinked demand curve as a model of oligopolistic behaviour.'

Discuss this statement, and consider whether alternative models of oligopoly represent any advance on the kinked demand model.

2. Assess the view that privatisation can have little impact on the behaviour of previously nationalised industries, since a state monopoly is simply replaced by a private one.

3. 'Attempting to learn how to make decisions is an exercise in futility. All the most important decisions are made by people with little time and even less information, acting on instinct.' Discuss.

4. Critically assess the relevance of the 'as if' principle used to justify the reliance on profit maximisation as the working objective of the modern business corporation.

5. (a) Evaluate the operational utility of demand elasticity estimates, and outline any interpretational difficulties in the use of such estimates.

(b) The annual demand function for a particular motor car is estimated as: D = 16000-10P/3+ Y2/1000 where D =annual demand, P =price in 's and Y =average disposable income.

(i) Given that the retail price next year will be 12 000, whilst average disposable income is expected to be 8000, estimate next year's annual demand. If the manufacturer receives 80% of the retail price for each car sold, estimate the manufacturer's revenue next year.

(ii) Find the retail price to maximise manufacturer's revenue next year.

(iii) If the marginal cost per car is estimated to be 6000, find the price to maximise profit next year. (iv) In the subsequent year the retail price is expected to rise to 13 000, whilst incomes should increase by 5%. Estimate demand and manufacturer's revenue for that year, and use this information to estimate the price and income demand elasticities.

6. 'There is a simple relationship between advertising and profitability: the most profitable firms are the ones that advertise most. Therefore advertising must increase profitability.' Discuss.

7. Critically examine the proposition that as the contemplated future volume of output increases, the expected unit cost of output declines.

8. Recommend a price and marketing strategy for the established automobile manufacturer seeking to enter the market for specialist competition motorcycles. Compare your recommendations to those for the automobile firm seeking to enter the volume small car market.