(a)[12]
Firms operating in perfect competition and firms operating in monopolistic competition will earn only normal profits over the long run. This means that firms in both of these market structures are equally efficient. Discuss, with the help of diagrams, the extent to which you agree with this statement.
(b)[13]
Interdependence is a defining feature of oligopoly firms. This creates a difficulty over the pricing decisions taken by such firms. Explain this statement and discuss the extent to which game theory can help to solve this problem.