AIMST UNIVERSITY

School of General and Foundation Studies

Academic Session 2016/2017
May 2016 Intake
BK022 PRINCIPLES OF ECONOMICS 2
ASSIGNMENT 2 SEMESTER 2
Question 1:
(20 marks)
With the aid of diagrams, discuss the following short run equilibrium conditions of
a firm under monopolistic competition:
(i)
supernormal profit
(ii) subnormal profit
Question 2:
(20 marks)
Explain why a video rental shop is an appropriate example of monopolistic
competition and the car manufacturing industry an appropriate example of
oligopoly.
(Refer to THREE (3) characteristics of each market structure: monopolistic competition and
oligopoly and relate to examples given in the question)
[Strictly advise no plagiarism or copy and paste work. If your assignment script is found to be
plagued then you will be seriously penalized.]

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* Deadline: 24/10/16 -1pm