"we all know that as the purchasing power of the economy falls there would be a definitenegative effect in the economy. If in case of Monetary policy, there is increase in interestrates there would be reduction in the cash flow and makes it difficult to reach out for loans.As we know real estate business relies heavily on loans, tightening will spoil the wholescenario.2.3 Competition is an essential element in the efficient working of markets. However,businesses are of different sizes and that can create unfair competition. In the UK, as in otherEuropean nations Competition policies are used to encourage and improve the competitiveprocess, and to ensure consumers feel the benefits of that process. You are required to identify at least five competition policy and other regulatory mechanismsin the UK and evaluate their impact on the activities of a selected organization(s).An essential tool and motivator for any kind of business to flourish in an economy is that ofcompetition/. It is one of the factors that force organizations to improve and grow to be abetter competition to their competitors and rivals and not lose the market share they hold.Competition also is healthy way of growing the business as the organization becomes morecompetitive, there is increasing work efficiency among its employees. This is one of the mostimportant reasons behind innovation and improved products in the economy. In case of UK,these competition policies help in conducting and maintain fair trade practices.Examples of Competition policy are: the policy relating to ownership, power, mergers andacquisitions.The following authorities have the accountability to scrutinize any illegal practices that takeplace in the competition in UK.? Competition commission: This authority is responsible for all the policies framed inthe country? Office of fair-trading: It sets out the condition that determines the monopoly in themarket and actions to correct any kind of problems associated.There are also various other regulatory authorities in UK that deal with any kind ofillegalities that take place, like for telecommunication related ones we have OFTEL,for gas industry we have OFGAS, for electricity we have OFFER and for waterOFWAT.3.1 Explain how pricing and output decisions of businesses is determined in thefollowing market structures a) Perfect competitionb) Monopolyc) Oligopolyd) DuopolyBuyers and Sellers meet and through their dealings helps in fixing the price of a good in themarket. So those factors that affect this characteristic and the process of interaction betweenbuyers and sellers and their working in the market makes up the market structure. There areseveral factors that affect like number of agents, their negotiation strength, ability to setprices, degree of concentration, power and uniqueness.There are several forms of market structure:1. Perfectly Competitive Market: In this type market structure, there are largenumber of buyers and sellers engaged in exchange of homogenous products.There is no restriction on the entry and exit of any buyer or seller from the market. This form of market structure has firms which are always price takers.The price is determined by the demand and supply factors in the wholeindustry and that price is to be adopted by the organization. There is very lesspower with the firms and they must be entirely dependent on the forces in themarket. As the firms sell homogenous products, there are perfect substitutes inthe market from which the consumers can choose.(Source:https://www.google.co.in/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad =rja&uact=8&ved=0ahUKEwjopv_VypbTAhWKpI8KHZ0cDHQQjRwIBw&url =http%3A%2F%2Fwww.economicshelp.org%2Fmicroessays%2Fmarkets%2Fper fect-competition%2F&psig=AFQjCNGR- xHBLrep0qLkle8VqlimqMHbMg&ust=1491800117828746) 2. Monopoly: In this kind of market structure there is a single large seller sellingdifferentiated products. The firm here is a price maker as he has theautonomous power of his product.The firm that produces the product candetermine its price based on its individuals cost and revenue and theconsumers of the product have to accept the price. As there is no competitionin the market consumer has no choice. There is tight restrictios on the entryand exit of the firms. As there is perfect differentiation in the products there is "