Monopolistic competition is a market structure that has both characteristics of monopoly and perfect competition. In this market structure, there are many firms in the industry, but each firm produces a slightly different product. This product differentiation gives each firm a degree of market power implying that they, they can set their own prices to some extent. The equation of the firm can be written as: Q=S[1b(PP)] Where: - Q is the quantity of output demanded - S is the total output of the industry - n is the number of firms in the industry - b is a constant term representing the responsiveness of a firm's sales to its price - P is the price charged by the firm itself, and P is the average price charged by its competitors Using a numerical example, explain how opening up of a market resulting in increase in market size would affect a competitive market. Note: - Refer to the Quoted Text below. International Economics Theory and Policy, Pg. 164-169 for guidance. - Feel free to make assumptions to answer the questions. - Opening of markets affects number of firms in an industry (n)