Question 1: Evaluate the claim that pure monopoly cannot exist so long as consumers have multiple ways to spend their money and firms must compete for buyers. Explain how cross elasticity of demand can help determine whether a firm is a monopoly.

Question 2: In which two of the four market structures would you expect to see the most advertising? Why would you expect to see a lot of advertising in these types of markets but little or none in the other two? Advertising is sometimes criticized as a waste of resources. Evaluate the validity of this claim by considering both benefits and costs of advertising.