1.(a) Explain, with the aid of a diagram, the long run equilibrium position of a monopoly firm.

(b) If firms wish to enter a monopoly market they will face barriers to entry.

Explain THREE of these barriers.

(c) If a monopoly firm wishes to engage in price discrimination, certain conditions must apply.

State and explain THREE of these conditions.

2.(b) State and explain FIVE factors that affect price elasticity of demand. (25 marks)

(c) A consumer spends 120 per month on a product when its unit price is 80c, and continues

to spend 120 per month on this product when its unit price increases to 1.

(i) Using the formula below, calculate the consumer's price elasticity of demand.

Show all your workings.

Q P1 + P2

P Q1 + Q2

(ii) Is demand for this product elastic, inelastic or unitary elastic?

(iii) Should the seller make any changes in the selling price of this commodity to increase

overall revenue? Explain your answer.

3Discuss how economic development in less developed countries (LDCs) might be promoted:

(i) by their own governments;

(ii) by foreign governments / agencies.

(b) (i) Discuss THREE economic benefits of economic development to LDCs.

(ii) Discuss THREE economic costs of economic development to LDCs.

(c) Discuss steps which could be taken to solve the debt crisis which LDCs are experiencing.

4.National Income statistics provide important information, but are subject to certain limitations.

(i) Explain THREE reasons why it is useful to have these statistics.

(ii) Explain THREE limitations as to the use of these statistics