A successful advertising campaign has a slogan, which is adopted by teenagers across Australia. Illustrate with a graph what will happen to the demand curve for the product being advertised, and the impact on equilibrium price and quantity.
Question 2
(a) Go to the internet auction site eBay at www.ebay.com.au and select the category ‘Jewellery & watches’, followed by ‘Loose gemstones’, and then choose ‘Opal’ with ‘Natural’ selected as the product type. How many natural opals are for sale at the moment? Note the wide array of sizes and prices of the opals. In what sense is there competition among the sellers and buyers in this market? How does that competition influence prices?
(b) If incomes were falling in Australia, what do you expect to happen to the demand for Opals? Use a diagram to explain your answer.
Question 3
Choose one industry that you think best represents each of the four market models:
i. Perfect competition
ii. Monopolistic competition
iii. Monopoly
iv. Oligopoly
(a) Provide at least three (3) reasons (in dot point form) to support your answers for each market model.
(b) Explain the profit maximising condition for each market structure
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