Please answer ALL the following questions and ALL parts for each question. In order to write excellent answers you need to use additional resources and to critically analyse, summarise, compare and contrast the resources chosen. 1. Please answer all parts of this question: a. Compare and contrast perfect competition with monopolistic competition, outline the underlying assumptions and provide examples of both market structures. b. Explain and show diagrammatically the short-run and long-run equilibrium of the firm both under perfect competition and monopolistic competition. (In total maximum 800 words; 40 points) 2. Define a natural monopoly, illustrate the underlying characteristics and provide examples of situations where natural monopolies are likely to occur. (In total maximum 600 words; 30 points) 3. With the use of examples, illustrate how governments can encourage innovation. (In total maximum 600 words; 30 points)
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