Question 3: [15marks]

a.Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs by using specific examples from everyday administrative activities. [5marks]

b.By using specific product markets briefly discuss the significant difference among the following market structures: (i) perfect competition, (ii) monopoly, (iii) monopolistic competition, and (iv) oligopoly. [5marks]

c.Why are externalities, public goods, and information asymmetry major problems in the market? Discuss. [5marks]