Answer the following:

1. What is meant by market failure? What are the four (4) sources of market? Briefly explain each. (15 pts.)

2. What is market power? (5 pts.)

3. What are barriers to entry? List four types of barriers to entry. (10 pts.)

4. Comment on the following statement: "A firm with market power is able to charge any price it likes." (5 pts.)

5. What is price discrimination and the motivation behind it? Provide some real - world examples of price discrimination in action. (10 pts.)

6. What is rent-seeking behavior? public choice theory? natural monopoly? (10 pts). 7. What is collusion? Give an example. ( 5 pts.)

7. List the characteristics of a monopolistically competitive market. ( 5pts.)

8. What is meant by product differentiation? ( 5 pts.)

9. What is a cartel? (5 pts.)

10. What is predatory pricing? ( 5pts.)

11. What is game theory? What is a dominant strategy? (10 pts.)

12. What is the Herfindahl- Hirschman index? ( 5pts)