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Question:
(a) With reference to the characteristics of market structure, describe why the market for powdered milk in Mauritius is an appropriate example of monopolistic competition while the soft drink industry an appropriate example of oligopoly.
(b) Using appropriate diagrams, explain how a firm under monopolistic competition reaches equilibrium in the short run and in the long run.
(c) Describe the different pricing strategies of firms under oligopoly.
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Elasticity of Demand This is a measure of how responsive the sales volume of goods is to changes in that product's price, equal to the marginal change in sales, divided by the
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