Your answer should be 1000 words or fewer and must fit within two (not three!) standard sized pages; do not use a cover page. Longer answers (above approximately 1000 words) earn reduced credit. Please credit any sources used, including books, articles, and web pages; the references are excluded from the length limit. Any standard method of citation is acceptable. You must indicate clearly direct quotations: any directly quoted text should be surrounded by quotation marks, and it should be absolutely clear that this is quoted text. QUESTIONS: ANSWER BOTH PARTS Q3 (i) How does the number of competitors in an industry influence performance measures such as profit and consumer surplus? What determines the likely number of players? Are we likely to see too much competition or too little? (ii) Describe a real-world situation in which the intensity of competition (for ex- ample, via the number of players) changed. What was the likely explanation for this change? How do your observations connect to your answers to (i)? ASSESSMENT GUIDELINES This short essay is an opportunity to apply microeconomic principles to a real-world case. It should review briefly the central ideas, describe an example that illustrates them, and find insights that are have relevance for the decisions of managers. Try to balance and connect parts (i) and (ii). Because of the restrictive length constraint, you should review only the concepts that are relevant. The discussion of the case should be self-contained and be a balance of description, interpretation, and analysis. Part (i): How relevant is the theory to the question? How accurate and appropri- ate is the statement and explanation of the theory? Part (ii): How relevant is the example? Is it documented with facts? How careful is the explanation of these facts? Does the example go beyond what a casual observer would know? How good is the quality of the analysis of the case? Is it well connected to the theory described in part (i)? Taking a business or other perspective, how interesting are the case, the implications, and the conclusions?
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