(a) Identify a market that the entry barrier is small. Do you expect firms in this market can earn

a high profit in the long run? Does an increase in demand for this good due to an increased

popularity of it raise its price and firms' profit? Explain your answers.

(b) How would you understand the following phenomenon using what you have learned about

price discrimination? (Note: It does not need to be the case of a pure monopoly.)

(i)

The price of food and drinks at the airport, especially inside the restricted area, is

generally much more expensive than those sold in the same store at other places.

(ii)

For many goods, supermarkets would offer deep discounts once for a few weeks.

(Hint: are the customers who wait for deep discounts different from those who do

not wait for it?)