Could you please help check, proofread whether there are any problems in my answers about Market Structure? Also, how can I improve my answer? (eg. Providing more detailed explanation) . Thank you very much for your help

1. Which of the following is an example of a market?

A. A person wins a prize from lucky draw

B. A street hawker sells toys

A housewife prepares dinner

A student cleans the board for teacher

My answer: B. A street hawker sells toys

2. 2. Which of the following is not a characteristic of monopoly?

A. Free entry

B. Seller is price taking

C. Firms are interdependent

D. Seller has extremely big market power

My answer: A. Free entry

3. Which of the following is NOT a characteristic of perfect competition?

A. Firms are interdependent

B. Homogeneous products

C. Perfect information

D. Price takers

My answer: A, Firms are interdependent

4. What is the market structure of shops selling sports shoes in Hong Kong? List three ways of competition among firms under this market structure?

My answer: Monopolistic competition ( no need to check its market structure, I am certain that this is correct).1. Price cut ( Price competition) 2. Providing after-sales services 3. Advertising ( 2,3 Non-price competition)

5. What is the market structure of petroleum companies (e.g. Esso, Sinopec) in Hong Kong? Explain your answer? My answer: Oligopoly. Firstly, there are several dominant sellers for selling petroleum in the market like Esso and Sinopec.

Secondly, there is interdependence of firms. Since there are only a few dominant sellers under oligopoly, the profits of a petroleum company are easily affected by actions of an individual petroleum company. For example, if one of the petroleum companies offer discounts to customers, other petroleum companies usually will follow suit and offer similar discounts to customers. Also, they engage in non-price competition by giving out different free gifts to customers, advertising through cooperation with the media.

Thirdly, there are barriers to entry of new petroleum companies under oligopoly. Huge capital are required for the mass production and transportation of petrol. With the huge capital requirements, it is difficult for new firms to compete with existing dominant firms and gain consumer confidence.

Moreover, the products traded in the market are mostly heterogeneous, although some of them may be homogeneous. After petroleum refining, the petroleum companies might use methods to adjust the quality of the petroleum slightly by filtering impurities away. This results in the quality of different types of petrol provided by different petroleum companies are slightly different. However, the petrol provided by the petroleum companies may be substitutes of each other.

6. Situation: Personal computers of the same types are sold in many shops at slightly different prices.

6.1 Explain with an example why there is such a price difference.

My answer: Although the personal computers of the same type in different shops look like the same, there is still product differentiation. For example, different marketing strategies are adopted by different shops, such as different type of advertising, packaging, after-sales services, differences in locations are source of product differentiation. An example would be buying the computer in a chain electronics store, there may be better packaging and after-sales service than a small store in Mong Kok. Product differentiation actually exists so this results in the differences in price.

6.2 Identify the market structure of these shops

My answer: Monopolistic competition

7. Cans of Coca-Cola are sold at different prices in different shops. Give TWO reasons why there is such a price difference?

Firstly, the different shops are under imperfect competition. Firms under imperfect competition are price searchers. They can adjust their selling price of the cans of Coca-Cola to maximize their profit. Therefore, the cans of Coca-Cola are sold at different prices.

Secondly, firms under imperfect competition may engage in price competition. They may have a price cut on the cans of Coca-Cola to attract more customers to purchase their products. Therefore, the cans of Coca-Cola are sold at different prices.