1. Assume firms in the short run are earning above-normal profits. Explain what will happento these profits in the long run for the following markets: a. Pure monopolyb. Oligopolyc. Monopolistic competitiond. Perfect competition
2. In certain industries, firms buy their most important inputs in markets that are close to perfectly competitive and sell their output in imperfectly competitive markets. Cite as many examples as you can of these types of businesses. Explain why the profits of such firms tend to increase when there is an excess supply of the inputs they use in their production process.