(a)[12]
Firms in perfect competition and firms in monopolistic competition will only make normal profit in the long run. This implies that firms in both market structures are equally efficient. Discuss, using diagrams, the extent to which you agree with this claim.
(b)[13]
Interdependence is an important feature of oligopoly firms. As a result, it creates a difficulty over the pricing decisions made by such firms. Explain this claim and discuss how far game theory can help to resolve this difficulty.