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1) Describe the characteristics of a monopolistically competition industry. Describe why monopolistic- ally competition firms find it important to establish brand loyalty for their product and service? How do try to create brand loyalty? Give Two examples of companies in this industry that have created loyalty.

2) If there is a merger of a firm with 25% market share and one with 20% market share, what will be the increase the Herfindahl Index after the merger? Show work here.

3) What happens in the long run for the monopolistic competition firm and for the oligopoly firm? Which of the two are better for the consumer and why?

Macroeconomics, Economics

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