TWO: MARKET STRUCTURES a) Explain, in details and using diagrams where appropriate, the three main salient characteristics of each of the following market structures: (i) Perfect Market (ii) Monopolistic competition market (iii) Monopolistic market (iv) Oligopolistic market [8 Marks] b) Draw a diagram to show a firm in a monopolistic competition market making a short run loss but remaining in production. In your diagram, include the labels for the following: AR for average revenue; MR for marginal revenue; AC for average cost; AVC for average variable cost and MC for marginal cost. [3 Marks] c) For price discriminating monopolist, the inverse demand functions for two markets are given as follows: =16 11 =9 22 Where: P1 is the price in sub-market 1 P2 is the price in sub-market 2 Q1 is quantity demanded in sub-market 1 Q2 is quantity demanded in sub-market 2 Using the above information, calculate the profit maximizing outputs and prices in each of the submarket when the industry's marginal cost equals 10 units