• How does a competitive firm, monopolist and monopolistically competitive firm determine its profit-maximizing level of output and price? Explain your answer.
• What do you understand by the concept of monopolistic competition? Explain how monopolistic competition is different from perfect competition and monopoly in both short- and long-run?
• Why monopolistic competition is less efficient than perfect competition. Explain your answer.
• Distinguish between shutdown and exit. When does a profit-maximizing competitive firm decide to shut down? When does it decide to exit a market? Explain your answer.