1) What entry barriers exist in (a) the fast-food industry, (b) cable television, (c) the auto industry, (d) the illegal drug trade, (e) potato chips and (f) beauty parlors? 2. Why might OPEC members have a difficult time setting and maintaining a monopoly price? 3 . If one gas station reduces its prices, must other gas stations match the price reduction? Why or why not? 4. Why is the mix of output produced in competitive markets more desirable than that in monopolistically competitive markets? 5. Prior to 1982, AT&T kept local phone rates low by subsidizing them from long-distance profits. Was such cross-subsidization in the public interest? Explain. 6. Why is there resistance to (a) local phone companies providing video and data services and (b) mergers of local cable and telephone companies?

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