1.Explain the determination of the optimal price and output combination in a situation of monopolistic competition. Use the resulting equilibrium to illustrate the statement that 'production inefficiency is a necessary price to pay for product variety'. Comment on this statement.

2. Assess the contribution of business games to the study of decisionmaking processes, illustrating your answer by reference to one business game with which you are familiar.

3. 'Given that the future is unknown, the best we can do is to estimate the likelihood of future events and then use expected profit as the decision criterion.' Discuss

4.Discuss the decision about resources to be devoted to demand estimation, primarily determined by the use to which forecasts are to be put.

5.'The fitting of mathematical trend curves is by far the easiest and cheapest method of forecasting long-run changes in product demand, and is likely to be just as reliable as any alternative method. ' Discuss.

6. Examine the methods available for demand estimation, comparing and contrasting the explanatory and extrapolatory approaches.

7.Explain what is meant by forecast reliability, and how this can be Examination questions and answer notes 343 estimated prior to forecast use. Refer to Chapter 5 and especially Application 5.

8. Explain what is meant by a new product, carefully defining the concept of 'newness', and examine the cost and demand estimation problems surrounding new product pricing.

9.Analyse the importance of the competitive environment, and explain the factors determining whether a 'skimming' or 'penetration' policy should be used, using the example given in the question, and its implicit emphasis on the importance of entry conditions.

10.Examine the role and consequences of advertising, contrasting the market expansion and redistributional implications of advertising.

11.Outline the model of advertising as information, and consider the circumstances in which advertising information reduces the cost of search to the consumer.