Consider the market structure of the clothing business in Dhaka City.

a) What type of market structure can this be characterized as? Explain your answer by linking the case of clothing businesses with the assumptions of the market structure.

b) As demand goes up, what happens to the profits of the clothing business in the short run?

c) If this leads to new entry, how will the market return to long run equilibrium to attaining normal profit? Show the diagram of profit and normal profit.

d) How can a clothing business continue to keep profits in the long run? Suggest two strategies they can apply.

e) In order to achieve productive efficiency in relation to their excess capacity problem, what can a clothing business do? Will it be a wise strategy to do so?