1.Manufacturers of laundry detergent and dishwashing soap reinvest a relatively large percentage of their sales revenues on advertising campaigns. Most of these advertisements that appear on television stress the fact that their product is "New and Improved" and "better than other leading brands". What sort of a market (perfectly competitive, monopoly, monopolistically competitive) is laundry detergent and why are the firms advertising? Please give an explanation.

2.When the government gives a patent to a company, it effectively creates a monopoly because no other company can copy the product on which the patent is granted for as long as the patent is valid (which is usually for 20 years). This monopoly often leads to higher prices for consumers, particularly in the prescription drug industry when patents are granted on new drugs. Why does the government grant a patent to companies which invent new products like prescription drugs, if these patents lead to higher prices for consumers? Please give an explanation.

3.

SMC 225 D - MR = P ATC Price and cost (dollars) 135 125 AVC 75 O 400 800 1000 Quantity