1. What factors explain the existence of monopoly power in markets? Do you believe any of these factors are more impactful than others? Explain your position.

2. "At the profit maximizing level of output, monopolies charge a higher price and produce a lower quantity than purely competitive firms."

Discuss this statement in some detail. What are the implications for resource allocation in a monopoly as compared to the allocation in pure competition?

3. What are network effects? What market power does a social network such as Facebook imply for a business that has a Facebook profile?

4. What market form characterises competition in the supermarket industry in Australia? What allows some firms to dominate the industry? Explain how Game Theory may provide some important insights into the rivalry that exists between the largest firms.